6Inventory Management

This chapter contains the following:

Overview of Implementing Inventory Management

Inventory Management functionality lets you manage warehouse activities such as replenishing inventory, counting stock (both cycle count and physical inventory), moving material within the warehouse, and issuing goods to manufacturing. Consigned inventory capabilities are supported as well.

Set up Oracle Fusion Inventory Management so that your users can take advantage of the Inventory Management work area to streamline warehouse operations.

This table describes the setup tasks in the Define Inventory Management task list.

Setup Task Required or Conditional Description

Manage Subinventories and Locators

Conditional

Configure parameters related to the transfer of material between two subinventories.

Manage Interorganization Parameters

Conditional

Configure interorganization parameters to define accounting information and relationships that exist between a shipping organization and a destination organization.

Manage Account Aliases

Conditional

Configure account aliases to provide an easily recognizable name or label for general ledger account numbers.

Manage Transaction Source Types

Conditional

Configure inventory transaction sources to use while performing transactions to classify transactions according to their origin, such as purchase order, sales order, account number, or physical inventory.

Manage Transaction Reasons

Conditional

Configure inventory transaction reasons to classify or explain the reason for an inventory transaction. An inventory transaction reason can be specified when performing miscellaneous transactions.

Manage Item Transaction Defaults

Conditional

Configure item transaction defaults to define default subinventories and locators for items for shipping, receiving, and movement request transactions.

Manage Material Statuses

Conditional

Configure user-defined material statuses to control the transactions that can be performed on the material. Material status can be assigned either at the subinventory, locator, lot, or serial number level.

Manage Pick Slip Grouping Rules

Conditional

Configure the grouping of picks into pick slips.

Manage Picking Rules

Conditional

Configure picking rules to enable the selection of material based on defined criteria.

Manage Picking Rule Assignments

Conditional

Configure the assignment of a picking rule to any combination of criteria and prioritize the rule assignment within the organization.

Manage Consumption Rules

Conditional

Manage rules to determine ownership change of consigned inventory.

Manage Intersubinventory Parameters

Conditional

Configure parameters for transferring material between two subinventories within an organization.

Manage Lot Grades

Conditional

Configure lot grades to describe the particular makeup and quality characteristics of items in a lot.

Manage Lot Expiration Actions

Conditional

Configure lot expiration actions to indicate the action required on a lot when it expires.

Manage Lot and Serial Attributes Mapping

Conditional

Assign lot and serial number attribute descriptive flexfield context to an item or item category.

Manage ABC Classes

Conditional

Configure ABC classes to identify the value groupings to which items will be assigned.

Manage ABC Classification Sets

Conditional

Configure the valuation and scope of the ABC analysis performed against an inventory based on quantity, value, or history of the item.

Manage ABC Assignment Groups

Conditional

Configure ABC assignment groups and associate ABC classes to the respective ABC assignment groups.

Manage Inventory Profile Options

Conditional

Define profile option settings and values to control inventory behavior such as Material Status Support.

Manage Inventory Lookups

Conditional

Review and maintain lookup values for Inventory, such as Movement Request, Pick Slip Print Options, and Lot Origination Type.

Manage Inventory Value Sets

Conditional

Create and edit inventory value sets.

Manage Inventory Descriptive Flexfields

Conditional

Define validation and display properties of descriptive flexfields for inventory. Descriptive flexfields are used to add user-defined attributes to entities.

Manage Inventory Account Alias Key Flexfield

Conditional

Define the inventory account alias key flexfield segments and validation for use as inventory account alias classification keys. The inventory account alias key flexfield must be defined for inventory to operate.

Manage Inventory Locator Key Flexfield

Conditional

Define the inventory locator key flexfield segments and validation for use as inventory locator classification keys. The inventory locator key flexfield must be defined for inventory to operate correctly.

Here are the steps to access the tasks for your Inventory Management setup:

  1. In the Setup and Maintenance work area, go to the Inventory Management functional area:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

  2. On the Setup: Manufacturing and Supply Chain Materials Management page, select All Tasks from the Show drop-down list.

Common Tasks That You Perform for Inventory Management

Inventory Management requires that you perform the following common tasks:

  • Manage Profile Options

  • Manage Lookups

  • Manage Value Sets

  • Manage Descriptive Flexfields

These tasks are common to most Oracle applications. For details about how to perform them, see the Oracle SCM Cloud: Implementing Common Features for Oracle SCM Cloud guide.

Subinventories and Locators

You can structure the relationship of inventory organizations, subinventories, and locators to match the physical structure of your warehouse.

One inventory organization contains two subinventories. One subinventory contains no locators, and the other subinventory contains two locators.

Relationship between inventory organization, subinventories,
and locators

Inventory Organizations

An inventory organization can contain one or more subinventories.

Subinventories

Define at least one subinventory for each inventory organization that you want to transact items into, from, or within.

Locators

A subinventory can contain one or more locators.

Define at least one subinventory for each inventory organization of item and inventory management usage.

You can create these kinds of subinventories:

  • Storage subinventories

  • Receiving subinventories

Storage Subinventories

A storage subinventory is used to store material in the warehouse. Material in a storage subinventory is reflected in on-hand quantity.

Receiving Subinventories

A receiving subinventory is used to temporarily store material before placing in a storage subinventory. Material in a receiving subinventory isn't reflected in on-hand quantity. An inventory organization need not contain a receiving subinventory.

You should take into account the following when planning to create subinventories and locators:

  • Subinventory-locator hierarchy

  • Considerations for creating subinventories

  • Considerations for creating item subinventories

  • Considerations for creating locators

Creating the Subinventory-Locator Hierarchy

You should consider the following when planning the hierarchy of subinventories and their corresponding locators:

  • The importance, for your organization, of creating a subinventory and locator hierarchy that represents the physical layout of your warehouse.

  • Your organization's plan for the movement of item and labor, and utilization of labor and equipment, for put away and picking.

    You should refer to these plans when sequencing the picking order of subinventories and locators.

Considerations for Creating Subinventories

You should consider the following when planning to create subinventories:

  • How many storage and receiving subinventories are required in your warehouse.

  • Whether you must distinguish between receiving and storage subinventories.

    Use storage subinventories for tracking on hand quantities.

  • Whether you want to associate items to subinventories and their locators by creating item subinventories.

Considerations for Creating Item Subinventories

You should consider the following inventory planning methods:

Inventory Planning Method When to Use

Min-Max Planning

Use when the enterprise is responsible for managing the min-max replenishment process.

Supplier Managed

Use when the supplier is responsible for managing the replenishment process. Oracle Fusion Supply Chain Collaboration uses this field for vendor-managed inventory.

Not Planned

Use when not planning inventory.

Considerations for Creating Locators

You should consider the following when planning to create locators:

  • Whether you want to allow users to dynamically create locators.

  • Whether you want to add items to locators.

  • Whether it is necessary to implement locator control.

    If you decide to implement locator control, consider whether you must implement locator control for the organization, for individual subinventories, or at the item level.

  • The level of granularity required for locators, such as: "row or rack" or "row or rack or bin".

FAQs for Subinventories and Locators

A locator is a physical area within a subinventory where you store material, such as a row, aisle, bin, or shelf. You can transact items into and out of a locator.

You can assign locator control to the subinventory only if an inventory organization's locator control parameter is set to assign locator control at the subinventory level.

Select Dynamic Entry to require entry of a locator for each item; the user can choose a valid predefined locator, or define a locator dynamically at the time of transaction. Select Item Level to define locator information for specific items. Select Prespecified to require entry of one of the predefined locators for each item.

If the item is associated with one or more subinventories (as one or more item subinventories), you can only select the subinventories with which the item is associated.

An item subinventory is an association of an item with a subinventory that's created when you add an item to a subinventory. You might want to restrict an item to a subinventory to store it with other items that have a similar size, volume, weight, specific storage requirement such as refrigeration, or the type of labor and equipment used to create the item. You also add an item to a subinventory to either perform min-max planning on the item, or include the item in an ABC classification set for ABC analysis.

Interorganization Parameters

Interorganization transfers enable you to transfer particular items between organizations.

Scenario

You are charged with performing the prerequisites that are necessary for your users to perform interorganization transfers of a particular item.

To enable interorganization transfers, you perform these steps:

  1. Ensure that you have created the inventory organization from which the item will be transferred, in addition to the inventory organization to which the item will be transferred.

  2. In the item's attributes, ensure that the item is assigned to the inventory organization from which the item will be transferred, in addition to the inventory organization to which the item will be transferred.

  3. Manage interorganization parameters to define the relationships that exist between the inventory organizations.

  4. Ensure that the item has the same unit of measure in each inventory organization.

FAQs for Interorganization Parameters

Interorganization parameters define the relationships that exist between source and destination inventory organizations. Define these relationships to enable users to create interorganization transfers. One interorganization parameter enables a one-way interorganization transfer from a source inventory organization to a destination inventory organization. To enable two-way interorganization transfers between two inventory organizations, create two interorganization transfers, with each inventory organization functioning as a source inventory organization and a destination inventory organization.

Select Direct to deliver this item directly to its location at receipt. Select Inspection to receive this item first, inspect it, then deliver. Select Standard to receive this item first, then deliver without inspection.

The remaining quantities on backordered transfer order lines are automatically canceled.

Account Aliases

There are multiple situations for which you might want to create an account alias. This scenario illustrates an example of one such situation.

Creating an Account Alias for a Temporary Project

Your company has a temporary project for which costs need to be tracked to a particular account. You create an easily-recognizable account alias for the account and have your employees cost the project's transactions to this account alias. You set the account alias to expire when the project ends, so that users cannot cost transactions to this particular project after the project ends.

FAQs for Account Aliases

An account alias is an alternate name for an account number, and is used to more easily identify an account when performing a transaction. You can select an account alias as a demand source when performing a reservation; you can also select an account alias as a transaction source when performing a miscellaneous transaction.

Transaction Sources and Types

A transaction type is used to classify transactions. Examples of transaction types are Purchase Order Receipt, Sales Order Issue, and Inventory Subinventory Transfer. You can define transaction types on the Manage Inventory Transaction Sources and Types page.

Transaction types are combinations of:

  • Transaction sources

  • Transaction actions

Transaction Sources

A transaction source is the type of entity against which a transaction is charged. Along with a transaction action, a transaction source uniquely identifies a transaction type. Examples of transaction sources are Purchase Order, Sales Order, and Inventory.

Transaction Actions

A transaction action is a system-defined type of material movement or cost update. Examples of transaction actions are Receipt into Stores, Issue from Stores, and Subinventory Transfer.

This scenario illustrates how you can define a transaction source and transaction type for a particular business need:

Scenario

Your organization frequently donates items that you manufacture to charity. You might want to define a transaction source called "Charity" and a transaction type called "Issue to Charity", using the "Issue from Stores" transaction action. When you donate an item to charity, you create a miscellaneous transaction using the Issue to Charity transaction type.

FAQs for Transaction Sources and Types

The transaction type for which you enable status control becomes an allowed transaction type for new material statuses that you create. When material status control is enabled for a transaction type and you are creating or editing a material status, you can choose to leave transactions of that transaction type as allowed, or disallow transactions of that transaction type.

If you do not enable status control for a particular transaction type, transactions of that transaction type are always allowed.

Default Stocking Unit of Measure

Default Stocking Unit of Measure for Inventory Management

Use the default stocking UOM to specify the units of measure to stock material within your warehouse.

You can use the default stocking UOM to process inventory transactions and replenish inventory. You can also use the default stocking UOM across all other inventory activities such as receiving, picking, cycle counting, and physical counting.

Take a look at some important considerations for using the default stocking UOM:

  • Benefits

  • Considerations

  • Setup

  • Details

Benefits

Here are the main benefits of using the default stocking UOM:

  • Ability to store the same item in multiple packing configurations

    In the Healthcare industry, it is common to transact and store the same item in multiple packing configurations. For example, a hospital may store bandages in one subinventory in cases of 100. The hospital might also store the same item in another subinventory in cases of 5. When performing inventory transactions, it's critical that your organization process inventory transactions and stores material in the correct stocking UOM.

  • Reduction in user error when performing inventory replenishment activities

    For example, when replenishing PAR locations, using the default stocking UOM ensures that the application creates the replenishment request document in the correct ordering UOM. This avoids costly mistakes that can occur when material is replenished in an incorrect stocking UOM.

  • Flexibility

    You also have the flexibility to set up the stocking UOM for an item at the inventory organization level, subinventory level, or both levels.

Using the default stocking UOM improves inventory processing times, accuracy, and visibility by ensuring that inventory transactions are processed and stored in the correct stocking UOM.

Considerations

Consider how you plan to implement units of measure usages within your organization. You can define item units of measure usages at the inventory organization level, subinventory level, or both levels. If you plan to stock an item in the same UOM across all subinventories, you can define the UOM at the inventory organization level. However, if you plan to stock an item in different UOMs based on subinventory, you should define UOM usages at the subinventory level.

Setup

To use default stocking units of measure for your inventory transactions, you must first enable the Enable Units of Measure Usages feature. Once enabled, you can access the Manage Units of Measure Usages task from the Setup and Maintenance work area.

In the Setup and Maintenance work area, use the Manage Units of Measure Usages task.

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Units of Measure Usages

You must enter both an inventory organization and item when defining unit of measure usages.

Once you define a unit of measure usage, it's available on the inventory Management transaction pages. For example, if you define a stocking UOM of Box of 5 for the item UOM-1000 on the Manage Units of Measure page, that stocking UOM (Box of 5) automatically defaults when you create an inventory transaction such as a miscellaneous receipt. Once you enter the subinventory on the transaction line, the stocking UOM automatically defaults.

Details

Here are some details for the default stocking unit of measure for inventory transactions:

  • The Manage Item Quantities page displays the item quantities in the primary and secondary UOMs instead of the default stocking UOM.

  • When performing transactions, the stocking UOM automatically defaults. However, you can choose to override the default stocking UOM.

  • When UOM conversion calculations result in fractional quantities for replenishment orders, the application rounds quantities to the next highest integer.

  • Drop shipments, Outside Processing (OSP), and return material authorization (RMA) flows don't use default stocking UOM. These processes use the primary UOM.

How You Use the Default Stocking UOM for Inventory Management

The default stocking unit of measure enables your organization to store the same item in multiple stocking unit of measures (UOM). You can define stocking unit of measures at the organization level, subinventory level, or both levels. This setup configuration enables you to automatically default the stocking UOM when performing inventory transactions.

With the default stocking UOM, you can ensure that your organization uses the correct stocking UOM when replenishing, storing, counting, reconciling, and issuing material. Additionally, your organization can comply with specific industry requirements, such as those within the healthcare industry.

Here's how you can use the default stocking UOM:

  • Processing inventory transactions

  • Replenishing inventory

  • Across all inventory activities

Processing Inventory Transactions

You can use the default stocking unit of measure across all inventory management activities to default the stocking UOM when processing inventory transactions. For example, when creating a miscellaneous receipt transaction, the UOM name automatically defaults once you select the subinventory on the transaction line. In addition, the application transacts and stores the miscellaneous receipt in the correct stocking UOM.

Replenishing Inventory

You can create inventory replenishment requests in the source organization's stocking UOM. The Ordering UOM field appears in the Sourcing region of the Manage Item Subinventories page. It's a read-only field and automatically defaults once you select the source organization and subinventory. This field represents the UOM associated with the source of the replenishment.

For example, if the source organization stores material in the stocking UOM named Case of 100, the ordering UOM associated with the replenishment request document is also put in the stocking UOM named Case of 100. If you configured the sourcing setup to generate an interorganization transfer order, then the associated transfer order is also generated in the UOM Case of 100. Using the stocking UOM reduces error and ensures that your organization creates replenishment requests in the correct UOM.

Across All Inventory Activities

Use the default stocking UOM when performing receiving activities such as receiving, inspecting, putting away, and returning material. For example, the stocking UOM automatically defaults when performing a put away transaction for supply documents such as a purchase orders, interorganization shipments, or transfer orders. The receiving process is streamlined by ensuring material is received and put away in the correct stocking UOM. Additionally, in the event that you need to return material, you can use the default stocking UOM when returning material. The stocking UOM displays in the receiving transaction history providing you with the ability to view the individual receiving transactions and the associated stocking UOM.

Use the default stocking UOM when processing and confirming shipments. Perform pick, pack, and ship process flows with the default stocking UOM. For example, the shipment line displays the requested quantity and shipped quantity in the default stoking UOM. When performing packing activities, you can view the quantity, requested quantity and shipped quantity shown in in their respective stocking UOM for each line. Quick Ship flows can also default the appropriate stocking UOM.

Note: Drop shipments, Outside Processing (OSP), and return material authorization (RMA) flows don't use default stocking UOM. They use the primary UOM.

Set Up Default Stocking UOM for Inventory Management

To set up a default stocking UOM for inventory, complete these steps:

  1. Enable the Units of Measure Usages feature.

    Once enabled, you can access the Manage Units of Measure Usages task in the Inventory Management functional area.

  2. Access the Manage Units of Measure Usages task.

    In the Setup and Maintenance work area, use the Manage Units of Measure Usages task.

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage Units of Measure Usages

You can define units of measure usages in the context of an inventory organization and item. You must enter both an inventory organization and item when defining unit of measure usages.

Once you define a unit of measure usage, it's available on the inventory Management transaction pages. For example, if you define a stocking UOM of Box of 5 for the item UOM-1000 on the Manage Units of Measure page, that stocking UOM (Box of 5) automatically defaults when you create an inventory transaction such as a miscellaneous receipt. Once you enter the subinventory on the transaction line, the stocking UOM automatically defaults.

FAQs for Default Stocking Unit of Measure

Can I configure unit of measure usages for an item at different levels?

Yes, you can configure units of measure usages for an item at the inventory organization level, subinventory level, or at both levels.

If you plan to stock an item in the same UOM across all subinventories, you can define the UOM at the inventory organization level. However, you if plan to stock an item in different UOMs based on subinventory, you should define UOM usages at the subinventory level.

Can I override the default stocking UOM?

Yes, you can override the default stocking UOM when performing inventory, receiving, and shipping transactions.

ABC Analysis

Overview of ABC Analysis

ABC analysis is an inventory categorization technique, which determines the relative value of a group of inventory items based on a user-specified valuation criterion.

Using ABC analysis you can identify items that will have a significant impact on overall inventory cost, while also identifying different categories of stock that will require different management and controls. ABC refers to the ranking you assign your items in order of their estimated importance suggesting that inventories of an organization are not of equal value, such as items classified as:

  • A items are very important for an organization and are very tightly controlled and accurate records are maintained

  • B items are important, but less important than A items and more important than C items and are less tightly controlled and good records are maintained

  • C items are marginally important with the simplest controls possible and minimal records are maintained

Typically, you use ABC analysis as the basis for defining the frequency in which items are cycle counted. The frequency with which you count your items depends upon criticality of the item, cost of the item, lead time of the item, past stock movements of the item as well as other criteria.

Set Up ABC Information

This example demonstrates how to set up ABC classes, create ABC classification sets, and perform ABC assignments to perform ABC analysis. You set up ABC information in the Setup and Maintenance work area.

This table summarizes the key decisions for ABC analysis:

Decisions to Consider In This Example

How to determine relative ranking of each item?

Create an ABC class

How to arrange the items in the decreasing order based on the defined criteria?

Create an ABC classification set

How to associate ABC classes with ABC classification sets?

Create ABC assignment groups

How to associate items to ABC classes within an ABC assignment group?

Perform ABC assignments

Can we update ABC assignments?

Yes

Can we purge an ABC assignment group?

Yes

Summary of the Tasks

In the Setup and Maintenance work area, you set up ABC information to perform ABC analysis:

  1. Create an ABC class

  2. Create an ABC classification set

  3. Create ABC assignment groups

  4. Perform ABC assignments

  5. Update ABC assignments

  6. Purge ABC assignment group

Creating an ABC class

You use ABC classes to identify the value groupings to which your items belong. You define these classes using your own terminology. For example, you might define classes A, B, and C, and later assign your items of highest rank to the A class, those of lower rank to the B class, and those of lowest rank to the C class. You can add to the list of classes you have already defined.

To create a new ABC class:

  1. In the Setup and Maintenance work area, go to the Manage ABC Classes task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classes

  2. On the Manage ABC Classes page, click Actions > Add Row.

  3. Enter the name in the ABC Class column.

  4. Enter a date on which the class becomes active in the Start Date column.

  5. Enter a date on which the class becomes inactive in the End Date column.

  6. Click Save and Close.

Creating an ABC Classification Set

You define an ABC classification set for your organization or for a specific subinventory within your organization. You select the classification set criterion, the scope of your analysis, and any additional information that may be conditionally necessary, based on your classification set criterion.

To create a new ABC classification set:

  1. In the Setup and Maintenance work area, go to the Manage ABC Classification Sets task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classification Sets

  2. On the Select Organization dialog box, select an organization and click OK.

  3. On the Manage ABC Classification Sets page, click Actions > Create.

  4. On the Create ABC Classification Sets dialog box, enter a name for the ABC classification set.

  5. Select one of the these values for Content Scope:

    Value Context

    Organization

    To evaluate items in the entire organization against the criteria set in the ABC classification set.

    Subinventory

    To evaluate items for their rankings against other items in the subinventory and not the entire organization. Select the subinventory to which you want to restrict the valuation. Additionally, select the value for Valuation Scope. If you want to restrict items only to the subinventory, select the valuation scope as Subinventory, but if you want the ranking done organization wide, select the valuation scope as Organization.

  6. Select a value for Criteria and accordingly set the start date and end dates.

  7. Click Submit.

Creating ABC Assignment Groups

You define an ABC assignment group to associate ABC classes with an ABC classification set. You assign items to ABC classes within a particular group. This lets you assign items to different ABC classes in different groups.

You use the data on the ABC Classification Set Items page as a guide when assigning items to ABC classes. On the ABC Classification Set Items page, you analyze the item data and decide which value (sequence, inventory, item percentage, or value percentage) to specify as the cutoff point of an ABC class.

To create an ABC assignment group:

  1. In the Setup and Maintenance work area, go to the Manage ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, click Actions > Create.

  3. On the Create ABC Assignment Group dialog box, enter a name for the ABC assignment group.

  4. Select an ABC classification set. In the ABC Classes table, enter the sequence number in which classes are ordered and enter the name of the class to use with this ABC group.

    Note: The lower the sequence number the higher the importance of the class.

  5. Click Save and Close.

Performing ABC assignments

You can assign and update ABC classes to an ABC assignment group where an ABC classification set was also entered. From the ABC Classification Set page you determine the cutoff points (sequence, inventory, item percentage, or value percentage) for assigning ABC classes. You can then use the classifications for other purposes such as determining how often you cycle count a given item.

To perform ABC assignments:

  1. In the Setup and Maintenance work area, go to the Manage ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Perform ABC Assignments.

  3. On the ABC Assignments page, enter the cutoff points for each ABC class. Each ABC class must have at least one item assigned to it, and all items in the ABC classification set must be assigned to an ABC class. Complete any of the fields, as shown in this table.

    Field Context

    Sequence

    The sequence number from the ABC Classification Set page for the last item to be included in each ABC class.

    Inventory Value

    The cumulative value from the ABC Classification Set page for the last item to include in each ABC class.

    Item Percentage

    The percentage of number of items from the ABC Classification Set page to include in each class.

    Value Percentage

    The percentage of total value from the ABC Classification Set page to include in each class.

    Note: For the Inventory Value, Item Percentage, and Value Percentage fields, if the value entered does not exactly match any item, the first item with a value greater than the value entered is allocated.

  4. Click Save and Close.

Updating ABC Assignments

You can change the class into which an item falls as a result of the automatic ABC assignment process if it is not appropriate. You can update an ABC group to include those items that were not a part of the initial ABC classification set. By updating the ABC group, you can expand the scope of your existing ABC classification sets without having to rerun any processes.

To update ABC assignments:

  1. In the Setup and Maintenance work area, go to the Manage ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, search for the ABC assignment group and search for the ABC assignment group and click Actions > Update ABC Assignments.

  3. On the Update ABC Assignments page, enter an inventory item and a valid ABC class.

  4. Click Save and Close.

Purging an ABC Assignment Group

You can purge an ABC group to delete all item assignments to ABC classes for the assignment group, as well as the ABC group itself. By purging an ABC classification set, you delete all item values and ranking for the ABC classification set, as well as the ABC classification set itself.

Note: You can purge an ABC classification set only when no ABC groups are using it.
  1. In the Setup and Maintenance work area, go to the Manage ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, search for the ABC assignment group.

  3. Select a row in the search results and click Actions > Purge ABC Assignment Group.

Predefined ABC Information

When you create a new inventory organization using Quick Setup, the INV_ORG_DEP_SEED_DATA_PUB.create service is run, which creates predefined ABC classes, an ABC Classification Set, and an ABC Assignment Group. This predefined ABC information uses criteria common to most companies.

Predefined ABC Classes

The INV_ORG_DEP_SEED_DATA_PUB.create service creates predefined ABC classes for the organization in the selected language.

These classes can be used for the ABC classification set of the newly created inventory organization.

This table lists the ABC classes created by the INV_ORG_DEP_SEED_DATA_PUB.create service:

Name Description

Class A

High

Class B

Medium

Class C

Low

Note: You can edit the classes to update the names and descriptions.

Predefined ABC Classification Set

The INV_ORG_DEP_SEED_DATA_PUB.create service creates a predefined ABC classification set. The ABC classification set is an ordered list of the items in the organization used to make the ABC assignments in the newly created inventory organization. The predefined ABC classification set is not automatically submitted because you will not have loaded your inventory items into the application. Once you load your inventory items, you must manually resubmit the ABC classifications set and then use the ABC assignment group to perform the ABC assignments.

This table lists the criteria used to create the predefined ABC classification set:

Field Value

Name

On-hand Value

Description

On-hand value of items in the organization

Content Scope

Organization

Criteria

Current on-hand value

Predefined ABC Assignment Group

The INV_ORG_DEP_SEED_DATA_PUB.create service creates a predefined ABC assignment group, which is used to link the ABC classification set with the ABC classes.

This table lists the ABC assignment group and the linked ABC classification set and ABC classes:

Assignment Group Name ABC Classification Set ABC Class

Assignment Group

On-hand Value

Class A

Assignment Group

On-hand Value

Class B

Assignment Group

On-hand Value

Class C

ABC Classes

You use ABC classes to identify the value groupings to which items belong. You can define these classes using your own terminology. For example, you can define classes High, Medium, Low, and later assign items of highest rank to High, those of lower rank to Medium, and those of the lowest rank to Low.

Typically, ABC refers to the ranking you assign your items in the order of their estimated importance suggesting that the inventories of an organization are not of equal value, such as:

  • A items are very important for an organization and are very tightly controlled and accurate records are maintained.

  • B items are important, but less important than A items and more important than C items and are less tightly controlled and good records are maintained.

  • C items are marginally important with the simplest controls possible and minimal records are maintained.

You can use ABC classes to group items for a cycle count where you count A items more frequently than B items. When you use ABC classes in this way, you perform an ABC analysis and assign items to classes based on the results of that analysis.

To delete an ABC class:

Note: You cannot delete an ABC Class that is in use in cycle count or in ABC Assignment Group Classes.
  1. In the Setup and Maintenance work area, go to the Manage ABC Classes task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classes

  2. On the Manage ABC Classes page, search for a class.

  3. Select the ABC class and click Actions > Delete.

  4. Click Save and Close.

FAQs for ABC Classes

You purge an ABC group to delete all item assignments to ABC classes for the assignment group, as well as the ABC group itself. Purging an ABC classification set deletes all item values and ranking for the ABC classification set you specify, as well as the ABC classification set itself.

Note: You cannot purge ABC information that is being used; for example, an ABC classification set is not purged if it is associated to an ABC assignment group.

ABC Classification Sets

You use an ABC classification set to classify some or all of an organization's items based on the scope and criteria specified in order to divide them into ABC classes for use in ABC analysis and cycle counting.

You can define and compile an ABC analysis for your entire organization or for a specific subinventory within your organization. You select the criterion, the scope of your analysis, and any additional information that may be conditionally necessary, based on your criterion. The combination of all these parameters constitutes an ABC classification set, identified by the ABC classification set name. You use this name to identify any activity pertaining to this ABC analysis.

For each ABC classification set, you select one criterion to value and rank each item included in the ABC classification set. The criterion that you select defines the ranks of items in the ABC classification set.

The following table lists the ABC classification set criteria to value and rank each item included in the ABC classification set.

ABC Classification Set Criteria Usage

Current on-hand quantity

Use the current on-hand quantity of inventory. Assign the sequence number in the descending order of quantity.

Current on-hand value

Use the current on-hand quantity of inventory times the item cost. Assign the sequence number in the descending order of value.

Current item cost

Use the current item cost to rank items based on their individual item cost.

Historical number of transactions

Use the historical number of transactions (transaction history) for the specified time period. Assign the sequence number in the descending order of the number of transactions.

Historical usage quantity

Use the historical usage quantity (transaction history) for the specified time period. Assign the sequence number in the descending order of quantity.

Historical usage value

Use the historical usage value (transaction history). This is the sum of the transaction quantities times the unit cost of the transactions for the specified time period. Assign the sequence number in the descending order of value.

Previous cycle count adjustment quantity

Use the previous cycle count adjustment quantity. This is the sum of the value of all cycle count adjustments since the last ABC classification set submission date. Assign the sequence number in the descending order of quantity.

Previous cycle count adjustment value

Use the previous cycle count adjustment transaction value. This is the sum of the value of all cycle count adjustments since the last ABC classification set submission date. Assign the sequence number in the descending order of value.

For example, if you use Current on-hand quantity as your compile criterion, an item with an on-hand quantity of 10 units is of higher rank than another item with a quantity of 5 units. If you use the Current on-hand value criterion, and the first item has a cost of $10 per unit and the second item has a cost of $25 per unit, the second item has a higher value than the first item because $100 ($10*10 units) is compared to $125 ($25*5 units).

When creating an ABC classification set, you can determine the ranking of items in an ABC classification set by using this content scope:

  • Organization: where all items in the organization are included in the ABC classification set, which includes the items with zero cost or zero quantity.

  • Subinventory: where you can restrict your ABC classification set to items within a particular subinventory. Additionally, you can value your items across all subinventories in the organization or just the one for which you have restricted the ABC classification set.

ABC classification set items are items in the ABC classification set. These items are listed in descending order based on the criteria associated with the classification set. The item with the highest value is listed first and the subsequent ones in the descending order. The information in the ABC Classification Set Items page is different depending on the selected ABC classification set criteria.

You use the ABC classification set items as a guide when assigning items to ABC classes. On the ABC Classification Set Items page, you can analyze the sequence numbers of items and decide which sequence number to specify as the cutoff point of an ABC class. You can specify the cutoff point for the ABC class on the Perform ABC assignments page.

Examples of ABC Classification Item Ranking

The ranking of the same items changes depending on whether you select an individual subinventory or the entire organization for the content scope, as well as whether the valuation scope is subinventory or organization.

The following scenarios show how the ranking of the same items changes depending on the content and valuation scope. In all examples, item WIDGET1 has an on-hand quantity of 5 units in subinventory STORES1. The same item also exists in other subinventories in your organization, for a total on-hand quantity of 30 units in the entire organization. Item WIDGET2, has an on-hand quantity of 10 units in STORES1 and a total on-hand quantity of 20 units in the entire organization. Item WIDGET3, has an on-hand quantity of 20 units in STORES2 and a total on-hand quantity of 40 units in the entire organization.

The ABC classification set criteria is Current on-hand quantity.

Content Scope is Organization

If you select the content scope for the ABC classification set as organization, WIDGET1, WIDGET2, and WIDGET3 are included in the ABC analysis. In the ABC analysis, 40 units for WIDGET3, 30 units for WIDGET1, 20 units for WIDGET2 are used, and WIDGET3 is ranked higher than WIDGET1 and WIDGET2.

Content Scope is Subinventory

If you select the content scope for the ABC classification set as subinventory STORES1, only WIDGET1 and WIDGET2 are included in the ABC analysis because they both exist in STORES1. However, the value to use is determined by what you select in the valuation scope. If you select to restrict valuation to the subinventory, 5 units for WIDGET1 and 10 units for WIDGET2 are used, and WIDGET2 is ranked higher than WIDGET1. However, if you select to value the same items across the organization, 30 units for WIDGET1 and 20 units for WIDGET2 are used, and WIDGET1 is ranked higher than WIDGET2.

Resubmit an ABC Classification Set

To resubmit an ABC classification set:

  1. In the Setup and Maintenance work area, go to the Manage ABC Classification Sets task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classification Sets

  2. On the Manage ABC Classification Sets page, search for the ABC Classification Set.

  3. Select a row in the search results and click Actions > Resubmit ABC Classification Set.

View an ABC Classification Set Item

To view the ABC classification set items:

  1. In the Setup and Maintenance work area, go to the ABC Classification Sets task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classification Sets

  2. On the Manage ABC Classification Sets page, search for the ABC Classification Set.

  3. Select a row in the search results and click Actions > View ABC Classification Set Items.

    The information in the ABC Classification Set Items page is different depending on the selected criteria. After determining each item's value, all the items in your ABC classification set are ranked in the descending order on the ABC Classification Set page. You can use this information as a guide in assigning your items to ABC classes.

Purge an ABC Classification Set

To purge an ABC classification set:

Note: You cannot purge an ABC classification set if it is used in an ABC Assignment Group.
  1. In the Setup and Maintenance work area, go to the Manage ABC Classification Sets task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Classification Sets

  2. On the Manage ABC Classification Sets page, search for the ABC Classification Set.

  3. Select a row in the search results and click Actions > Purge ABC Classification Set.

FAQs for ABC Classification Sets

When you resubmit an ABC classification set, the items for the classification set are re-sequenced according to current values of the classification set criteria.

To rank the items at the subinventory level but base the valuation ranking on the organization, select the content scope as subinventory and then select the valuation scope as Organization.

Historical Usage Quantity ranks items in the ABC classification set by the quantities that the items have been used historically, for the period that you specify.

Historical Usage Value ranks items in the ABC classification set by their historical values, which is the sum of the transaction quantities times the unit cost of the transactions for the time period that you specify.

ABC Assignment Groups

ABC assignment groups link a particular ABC classification set with a valid set of ABC classes. You selectively reduce or increase the number of ABC classes you want to use in your item assignments for a particular ABC classification set. For example, you have five classes, A, B, C, D, and E, defined for your organization where you perform your ABC analysis by subinventory. The first subinventory is rather small. You need only three classes in which to divide your items. You define an ABC group, associating the ABC classification set for the first subinventory with the classes A, B, and C. The second subinventory for which you associate an ABC classification set is much larger. There are five distinct value groupings of items. You define a second ABC group, associating the ABC classification set for the second subinventory with all five classes defined for your organization, A, B, C, D, and E.

These groups are used when you automatically assign your items to ABC classes. It ensures that you divide your items into the exact number of groupings you specified in the ABC group. You can assign the same item to different ABC classes in two different ABC assignment groups. You must also assign a sequence number to each class associated with the ABC group. The class with the lowest sequence number is assumed to have the highest rank and will have higher rank items assigned to that class than the next higher sequence number. Using the A, B, and C classes in the example, you might assign the A class a sequence number of 1, the B class a sequence number of 2, and the C class a sequence number of 3. (Sequence numbers 10, 20, and 30 would give the same result.) When you later assign your items to ABC classes, the first grouping of items in the descending value list are assigned to class A, the next to B, and the last to C.

You may update an assignment group to add new classes. However, you cannot delete a class. If you need to delete a class, you must create a new assignment group with only the desired classes.

You can use ABC assignment groups with cycle counting, for example to specify that A items are counted more frequently than B items.

Note: An ABC assignment group must have at least one ABC class associated to it.

To edit an ABC assignment group:

  1. In the Setup and Maintenance work area, go to the ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Edit.

  3. On the Edit ABC Assignment Group page, select the ABC classes you want to add to your item assignments for the ABC classification set.

  4. Click Save and Close.

To delete an ABC assignment group:

Note: You cannot delete an ABC assignment group if it is used in a cycle count.
  1. In the Setup and Maintenance work area, go to the Manage ABC Assignment Groups task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage ABC Assignment Groups

  2. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Delete.

ABC Assignments

When you define ABC assignments, you must specify the cutoff point for each ABC class. Each ABC class must have at least one item assigned to it and all items in the ABC classification set must be assigned to an ABC class.

You need to provide at least one of the four values against the ABC classes. The last ABC class is automatically associated with the remaining items based on the entries for other ABC classes.

You can assign and update ABC classes to an ABC assignment group where an ABC classification set was also entered. You can use the ABC Classification Set Items report to assign items to ABC classes and to decide which value (sequence, inventory, item percentage, or value percentage) to specify as the cutoff point of an ABC class. You can then use the classifications for other purposes such as determining how often you cycle count a given item.

In the Perform ABC Assignments page, the fields not specified by you are dynamically calculated. The values for the last ABC class are automatically calculated when you specify a value for the second to last ABC class.

If you're not satisfied with the class into which an item falls as a result of the automatic ABC assignment process, you can change it. For example, assume you compiled your ABC analysis based on historical usage value. You have a relatively new item in your inventory that was ranked lower in your ABC Classification Set Items report since it has very little transaction history on record. Therefore, after the assignment process, this item was assigned to a class of low rank. However, you know that in the future, this item will have a high usage value and should really be classified as a high rank item. You use the Update ABC Assignments page to reclassify this item to now be a high rank item.

You can also update an ABC group to include those items that weren't a part of the initial ABC classification set. You can expand the scope of your existing ABC classification sets without having to rerun any processes. For example, if you start stocking a new item in your inventory, you can make it a part of your existing ABC groupings through the update process. Otherwise, you would have to start all over by recompiling your ABC analysis and reassigning your items to ABC classes. With the whole process starting from the very beginning, you also run the risk of losing any changes you might have made to your item assignments.

FAQs for ABC Assignment Groups

You update the ABC item assignments when you need to:

  • Update the class into which an item falls.

  • Include those items that were not included in the ABC classification set items.

  • Add items that are new to the company.

Note: This is an optional step and only needs to occur on an as-needed basis.

Purging an ABC assignment group deletes all ABC class assignments to the ABC assignment group, as well as the ABC assignment group itself.

Inventory Transaction Reasons

An inventory transaction reason is a standard means of classifying or explaining the reason for a transaction, and can be used when performing any type of material transaction. For example, you could define the inventory transaction reasons Theft, Misplaced Items, and Damaged Items for classifying adjustment transactions when performing a cycle count or physical inventory count.

FAQs for Inventory Transaction Reasons

The transaction reason will only be available when you perform an inventory transaction in the reason type and reason context that you select. For example, if you create an inventory transaction reason with a reason type of Receiving and a reason context of Change Subinventory/Locator, the user will only be able to select that transaction reason when the user is in Receiving and moving material to a different subinventory and locator combination.

Item Transaction Defaults

An item transaction default specifies the default subinventory or locator for a specified item when the specified shipping or receiving transaction is performed on that item. The default subinventory or locator is included in the item's default shipping or receiving information. Note that for movement requests, if a user does not specify a locator when transacting an item into a locator-controlled subinventory that you specify as the item transaction default, the application determines the put-away locator.

Set up item transaction defaults on the Manage Item Transaction Defaults page.

Material Statuses

Material status control restricts the movement and usage of portions of on-hand inventory.

Using material status control enables you to control whether you can pick or ship a sales order, or issue material for a sales order or account. You can also specify whether material needs to be quarantined until you inspect it. In addition, you can determine whether products with a particular status can be reserved, included in available to promise calculations, or netted in production planning.

This topic discusses:

  • Material status control levels

  • Material status transactions

  • Cumulative effective status

Material Status Control Levels

You assign material statuses at the subinventory, locator, lot, and serial number levels.

When you assign a material status to a subinventory or locator, items are not assigned the material status of the subinventory or locator. Instead, items take on the behavior indicated by the material status that is assigned to the subinventory or locator.

To assign a material status to a lot or serial number, you must first enable the item attributes Lot Status Enabled and Serial Status Enabled on the item in the item master organization.

You can optionally assign a default lot or serial number status to an item in the item master organization. When you do so, the item retains the lot or serial number status through all inventory transactions, including interorganization transfers.

Material Status Transactions

When you create a material status, you select the allowed and disallowed transaction types for that material status. Note that you must enable status control for transaction types to make them available to allow and disallow. Transactions types for which you do not enable status control are always allowed.

Cumulative Effective Status

A cumulative effective status is the combination of all disallowed transactions. If a transaction is disallowed at the serial number, lot, locator, or subinventory level, the transaction fails. For example, if you have a locator whose status disallows miscellaneous issues, and that locator is in a subinventory whose status disallows sales order issues, you cannot perform transactions of either transaction type for material in that locator.

Material statuses provide more flexible control of transacting material. For example, you can create a Damaged material status to disable damaged material from being shipped to a customer.

Before creating material statuses, you should:

  • Determine if material statuses are necessary

  • Determine allowed and disallowed transaction types

  • Determine material statuses to define

Determining if Material Statuses are Necessary

Consider the needs of your organization, and whether it is necessary to create material statuses.

For example, if your organization operates on a small scale or you want to manage the statuses or items manually, it might not be necessary to create material statuses. By default, all the material is in Active status, which allows transactions with no restrictions.

Determining Allowed and Disallowed Transaction Types

Consider the needs of your organization, and the transaction types that should be allowed.

For example, damage to your warehouse's racks is making locations in the racks, and the material in those locations, inaccessible. You can create a material status to disallow transactions on the inaccessible material. Once the damaged racks have been repaired, you can create a material status to allow transactions on the material that is once again accessible.

Determining Material Statuses to Define

Consider the needs of your organization, and the material statuses that are necessary to define for your organization.

Following are examples of questions that you can ask when determining material statuses for your organization:

  • What are the kinds of items that are handled in the warehouse?

  • Does the consumption of material needs to be restricted when it needs to inspected for quality assurance?

  • Should users be allowed to ship material, such as food or pharmaceuticals, to customers if the refrigerator storing the material is broken?

Pick Slip Grouping Rules

By creating pick slip grouping rules, you organize how picking lines for released sales orders, transfer orders, return transfer orders, and work orders are grouped onto pick slips. For example, if you select order number as a grouping criterion, then all items on the sales order or all components for a work order are grouped onto a single pick slip.

These aspects of a pick slip grouping rule can reduce time spent on planning and organizing:

  • Group pick slips based on criteria

  • Specify effective date for the grouping rule

In the Setup and Maintenance work area, use the Manage Pick Slip Grouping Rules task to set up your pick slip grouping rules:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Pick Slip Grouping Rules

Criteria Based Grouping of Picking Lines

Enables you to specify more than one grouping criteria for picking. For example, if you select Shipment and Ship-to Location as grouping criteria, then all the picking lines grouped together on a pick slip are for the same shipment and ship-to location.

Effective Date

Enables you to specify the date from which you want the pick slip grouping rule to come into effect.

Picking Rules

Picking rules enable you to define the criteria that determines how material is consumed. For example, LIFO, FIFO, Lot Ascending, Locator Ascending. After you create a picking rule, you can enable the rule for usage in various organizations.

In the Setup and Maintenance work area, use the Manage Picking Rules task to set up your picking rules:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Picking Rules

A group of picking rules with different criteria can address the various needs of consuming material in an organization. This criteria determines how material should be consumed:

  • Material restriction

  • Allow partial picking

  • Material sort

Material Restriction

The material restriction criteria you must specify include:

  • Shelf Life Days: Indicates the minimum number of days prior to expiry that the material can be consumed.

    For example, if an item with an expiration date of June 30 is assigned to a picking rule that dictates a 60-day shelf life restriction, then that item must be picked no later than May 1, which is 60 days before its expiration date.

  • Enforce Single Lot: The enforcement of a single lot for the specific picking rule.

    If not, multiple lots may be picked.

Allow Partial Picking

Enables you to specify if the demand line can be partially picked if the total quantity for the order lines is not available. For example, the requested quantity is 100 and the quantity available using the picking rule is 60. In this case, allow partial picking determines if the available quantity of 60 is picked or nothing is picked at all.

Material Sort

The sort attributes that you can assign priorities to are Lot, Locator, Subinventory, and Revision. You can have only one priority based on a sort attribute and type such as Locator Ascending, Locator Descending, Revision Ascending, or Revision Descending. For example, if you assign the sort attribute and type Lot Ascending to priority 1, then you cannot assign the same sort attribute to another priority in the same picking rule regardless of the sort type being Ascending or Descending.

Material sort criteria enable you to specify a priority to the sorting criteria. You can do this by assigning priority levels, with priority 1 being of highest priority and priority 3 being of lowest priority. The sort criteria can be based on four different attributes; Lot, Locator, Subinventory, and Revision. Before assigning material sort criteria priorities, consider this question:

  • What sort criteria is relevant to the picking rule you are creating?

Relevance to the picking rule

Consider the relevance of the sort criteria to the picking rule you are creating. For example, if the picking rule you are creating is primarily aimed at lots, then select sort criteria that will assist you in sorting by lots; Lot number ascending or lot number descending.

Picking Rule Assignments

Picking rule assignments enable you to assign an organization and sequence to a picking rule. It provides mechanisms to:

  • Indicate if a picking rule can be used in an organization.

  • Prioritize the various rules available to be used in an organization.

  • Define set of criteria when a rule should be activated.

You can then assign certain criteria to the picking rule assignment based on which the material will be picked. Note that the same picking rule can have multiple rule assignments in an organization.

In the Setup and Maintenance work area, use the Manage Picking Rule Assignments task to set up your picking rule assignments:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Picking Rule Assignments

The example in this table demonstrates how picking rule assignments work for an item that is lot controlled and expiration enabled.

Picking Rule name Rule details

Rule 1

LOT FIFO

Rule 2

LOT LIFO

The facility usually follows the FIFO rule and ships the oldest material first. However, for their loyal customers, for example, Loyal, they would like to follow the LIFO rule and ship the newest material first. The loyal customers are given priority over their other customers. In order to achieve this, the facility needs to have two picking rule assignments in order of priority.

This table demonstrates picking rule assignments in order of priority.

Picking Rule name Picking Rule Assignment criteria

Rule 2

Item is specified and customer is specified as "Loyal" as part of the criteria.

Rule 1

Item is specified but customer is not specified as part of the criteria.

According to the way the picking rules are assigned in the earlier picking rule assignments table, the application will first look at the high priority assignment and apply the picking rule assignment in the manner shown in the following table. The table describes scenarios and results for both "Loyal" and not "Loyal" customers.

Scenario Result

Demand line for specified item and from customer specified as "Loyal."

Rule 2 is applied and newest material is supplied following LIFO.

Demand line is for specified item and customer is not "Loyal."

Rule 1 is applied and oldest material is supplied following FIFO.

Picking rule assignments provide you the flexibility to:

  • Assign sequence to the rule assignment

  • Define criteria for the assigned picking rule

Assigning Sequence

Enables you to prioritize the rule assignment with respect to the other rule assignments.

Define Criteria

Enables you to specify the details when a rule on a particular picking rule assignment is activated. For example, if you create a picking rule that picks lots based on FIFO and select a specific customer in the criteria, then according to the picking rule assignment, the item is picked for that customer based on FIFO.

You can select any combination of criteria after assigning a picking rule. Selecting the criteria enables you to specify when the rule assignment is used. For example, if a picking rule, which allocates lots based on FIFO, is assigned to a particular customer, then the material picked for that customer is allocated based on FIFO.

Before selecting criteria for picking rule usage consider:

  • Which combination of picking rule and criteria will help achieve optimum material selection for your organization?

  • What is your organization's preference for picking based on the available criteria?

Specifying criteria for picking rule assignment

You must consider the combination of picking rule and criteria that will meet your requirements on material consumption in your organization. For example, you have a picking rule that ships material based on Lot FIFO. You can assign that rule to a particular customer so that material for that customer is shipped based on FIFO.

Specifying criteria based on preference

Before selecting the criteria, you must consider your organization's preference for picking based on the available criteria.

  • Customer

    Consider your organization's picking order preference on what material to ship to which customer. For example, if certain kind of material should be picked based on customer requirements, then the rule assignments with customer as criteria are effective.

  • Carrier

    Consider your organization's preference on what material to ship based on carrier. For example, if the demand line is to be shipped via a specific carrier, then the carrier-based rule assignment will be effective.

  • UOM class

    Consider your organization's preference on what material to ship based on UOM class. For example, if the demand line to be shipped specifies a UOM that belongs to a particular UOM class, then the UOM class-based rule assignment will be effective

  • UOM

    Consider your organization's preference on what material to ship to based on UOM. For example, you have the following rules. Rule 1 sorts the subinventories in such a way that the item is stored by UOM 'Case' in the top subinventories. Rule 2 sorts the subinventories in such a way that the item is stored by UOM 'Each' in the top subinventories. You can sequence the rule assignments such that the correct demand lines with appropriate UOMs are picked using the appropriate rules.

  • Source subinventory

    Consider your organization's preference on what material to ship to from which source subinventory.

  • Destination subinventory

    Consider your organization's preference on what material to ship to which destination subinventory.

  • Item

    Consider your organization's preference for particular items. For example, if the material needs to be consumed in a certain way because of the characteristics of the item, then the appropriate picking rule should be assigned to the item criteria. Take the case of milk products that should be consumed within the expiration date. In that case, a picking rule that has shelf life material restriction and assigned to item criteria "milk products" can work best in optimizing material selection.

  • Item type

    Consider your organization's preference to ship material that belong to particular item types. You can select the best possible combination of a picking rule and item type that will help make selection efficient.

  • ABC Assignment Group and Class

    Consider your organization's preference on material to ship based on a particular ABC assignment group and class.

  • Transaction source type

    Consider your organization's preference on material to ship based on a particular transaction source type.

  • Transaction type

    Consider your organization's preference on material to ship based on a particular transaction type.

  • Transaction action

    Consider your organization's preference on material to ship based on a particular transaction action.

FAQs for Picking Rule Assignments

You can enter different values into the Start Date and End Date fields. For example, if you select Week, you can enter 1 to represent the first week of the year, and 52 to represent the last week of the year. If you select Day of the Month, you can enter 1 to represent the first day of the month, and 31 to represent the last day of the month.

Inventory Consumption Rules

Consumption rules enable you to specify when the consumption of consigned inventory (ownership change) occurs. You define consumption rules on the Manage Consumption Rules page based on attributes such as transaction type, item, from organization, to organization and more. For example, you can specify subinventory transfer, interorganization transfer, or internal material transfer transactions to trigger ownership changes.

If you create a rule with a higher level of granularity and another rule with a lower level of granularity, the rule that is created at the highest level of granularity (which is wider in coverage) applies during transactions.

Note: Interorganization transfers trigger consumption (ownership change) by default. If you want the material to remain consigned, you must set up a consumption rule to specify that consumption does not occur with interorganization transfers.

Example

This example depicts a consumption rule defined to trigger an ownership change for a transaction type of subinventory transfer. The following table shows the consumption rule setup which carries attributes such as transaction type, inventory organization, owning party, from subinventory, to subinventory, and item.

Transaction Type Inventory Organization Owning Party From Subinventory To Subinventory Item

Subinventory transfer

M1-Supplier

Allied Supplier

FGI

Stores

CM6000

Consigned inventory refers to items that are in the possession of one party, but remain the property of another party by mutual agreement.

The process of consigned inventory follows steps between the buyer and seller. You start with a consignment agreement and end with paying the supplier. The following figure shows the steps of the consigned inventory process flow.

Consigned inventory process flow between buyer
and supplier

Consignment Agreement

The consigned inventory process starts with a buyer entering into a consignment agreement with a supplier. The consignment agreement carries the terms related to the consignment arrangement between the trading partners, items to be purchased on consignment, and the price associated with the items.

Consignment Order

The buyer periodically generates consignment orders requesting the supplier to ship goods.

The consignment order uses the terms and conditions of the consignment agreement and specifies the delivery details, quantities, locations, and dates for the consigned goods to be delivered.

Ship and Receive Items

Once the supplier ships goods, and the inventory has been received, the inventory is held as consigned stock. The inventory is in the possession of the buyer. However, the ownership of the inventory remains with the supplier.

Note: For regular (nonconsigned) inventory, once goods are received, the ownership changes to the buying party.

Consumption Advice

When the inventory is consumed, a consumption advice is generated based upon a frequency agreed upon between the buyer and supplier. The consumption advice communicates to the supplier the consumption transactions that occurred within a given period of time.

Invoice and Pay Supplier

The consumption advice serves as the document to initiate financial settlement for the consumed inventory. You also have the option to pay-on-use to pay your supplier immediately upon usage of the consigned inventory.

Ownership changes from the supplier to the buyer when the buying organization consumes the consigned inventory. This process is referred to as consumption.

These factors are important regarding the consumption of consigned inventory:

  • Ownership change

  • Explicit or implicit transaction

  • Lot and serial

  • Consumption transaction pricing

Ownership change

You can define consumption rules to specify whether the transfer of consigned inventory between two inventory locations triggers an ownership change (consumption). When you execute a transfer between organizations, your previously defined consumption rules determine whether or not the transfer results in an ownership change.

There are two types of consigned inventory transactions:

  • Transfer to Owned: Transfers consigned inventory to owned inventory. This transaction transfers the ownership of the inventory from the supplier to the internal organization.

  • Transfer to Consigned: Transfers ownership of the inventory from the internal organization to the supplier.

Explicit or Implicit Transaction

You can choose to perform consumption transactions both explicitly and implicitly.

With explicit consumption, you specify the external owning party whose goods will be transferred to the internal organization.

With implicit consumption, consumption is a result of an inventory transaction such as a sales order issue. Most transactions occur through implicit consumption. You can configure the transaction types that trigger consumption through the setup of consumption rules.

For implicit consumption, the application generates two separate inventory transactions. The first transaction represents the consumption (change in ownership). This table shows a Transfer to Owned transaction. This transaction records the change in ownership between the original owning party (Allied Supplier) and the new owning party (Organization M1).

Transaction Type Item Quantity Owning Party Owning Party

Transfer to Owned

100C

10

Allied Supplier

Organization M1

The second transaction represents the movement of inventory. This table shows the transaction to record the movement of inventory. The consumption rules indicate that ownership changes when Item 100C transfers from source subinventory FGI to destination subinventory Stores.

Transaction Type Item Quantity Source Subinventory Destination Subinventory

Subinventory Transfer

100C

10

FGI

Stores

The two, separate transactions allow the segregation of transactions involving the change in ownership and the movement of material.

Lot and Serial

You can select lot and serial controlled items for a specific owning party when executing consigned inventory transactions.

Consumption Transaction Pricing

When the consumption transaction takes place, the application uses the terms of the associated consignment agreement to calculate the price that is in effect at the time of consumption. The calculated price is based on the date of consumption since this represents the point when ownership transfers from the supplier to the internal organization. Oracle Fusion Inventory Management interfaces with Oracle Fusion Purchasing to determine the current price from the consignment agreement.

A consumption advice is a periodic summary report of consumption transactions that reports the usage of consigned inventory to the supplier based upon a consumption advice frequency. The consumption advice stores the details needed to communicate information to the supplier such as item quantity and value of the inventory consumed in the warehouse. The consumption advice also serves as the document to initiate financial settlement for the consumed material.

Intersubinventory Parameters

When material is transferred between two subinventories within an organization, intersubinventory parameters are used to determine the transfer type and receipt routing.

In the Setup and Maintenance work area, use the Manage Intersubinventory Parameters task to configure your intersubinventory parameters:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Intersubinventory Parameters

Inventory Descriptive Flexfields

You can define descriptive flexfields for transfer orders at the header, line, and distribution levels. This enables you to configure the Manage Transfer Order task to extend system functions to meet your specific needs. For example, these user-defined attributes can enable integrations to support various reporting, labeling, compliance, and analytics requirements.

You must set up descriptive flexfields for transfer orders in the Manage Inventory Descriptive Flexfields task before you can use descriptive flexfields for transfer orders.

  • Set up the Manage Inventory Descriptive Flexfields task

  • Use descriptive flexfields to transfer orders

Set Up the Manage Inventory Descriptive Flexfields Task

In the Setup and Maintenance work area, use the Manage Inventory Descriptive Flexfields task to set up your Inventory descriptive flexfields:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Inventory Descriptive Flexfields

On the Manage Inventory Descriptive Flexfields page, enter Transfer Orders in the Module field in the search area. Then, you can edit the header, line, or distribution levels, and add the descriptive flexfields needed for your configuration.

Use Descriptive Flexfields to Transfer Orders

With descriptive flexfields for transfer orders, you can enter user-defined attributes at the these transfer order levels:

  • Transfer order header

  • Transfer order line

  • Transfer order distribution

Access descriptive flexfields from the Additional Information area in the Transfer Order header section of the Edit Transfer Order page. You can also access descriptive flexfields by clicking the Additional Information columns at the transfer order line and distribution levels of the transfer order.

Item Keyword Search for Inventory

Item Keyword Search for Inventory

Item keyword search enables you to view and search for items using cross-referenced identifiers across all inventory pages.

Use the Manage Item Keyword Search Attributes task in the Set Up and Maintenance work area to set up the item relationship attributes. This task is included in the Item functional area inside the Manufacturing and Supply Chain Materials Management offering. It's mandatory for your Supply Chain Application Administrator to enable the Item Keyword attribute.

With item keyword search, you can search for items and objects on all inventory pages with three standard fields:

  • Item

  • Item Description

  • Item Keyword

The Item Description and Item Keyword fields are hidden by default. Select these fields from the Add Fields button in the search area on inventory pages.

Note: Item relationships must be defined during item definition.

Integrate with 3PL and Warehouse Management Systems

Third-Party Logistics and Warehouse Management Systems

A third-party logistics (3PL) provider typically specializes in integrated operation, warehousing, and transportation services that can be scaled and configured to customer need based on market conditions. A warehouse management system (WMS) is a software application designed to support warehouse or distribution center management and staff. This application facilitates management of available resources to move and store materials into, within, and out of a warehouse, while supporting staff in material movement and storage.

Oracle Fusion Applications provide a central integration framework that coordinates communication with a 3PL system or WMS to support purchase order receipts, returns to suppliers, internal material transfers, inventory transactions, and sales order shipments. Using Simple Object Access Protocol (SOAP)-based web services, Oracle Fusion Inventory Management communicates receiving advice and shipment requests to a 3PL provider or external WMS for processing. After completion of processing in the 3PL system or WMS, Inventory Management accepts receipt confirmations, shipment confirmations, and inventory transactions from the 3PL system or WMS.

Overview of Inventory Management Integration with 3PL and Warehouse Management Systems

Oracle Fusion Inventory Management supports a central integration framework for working with third-party logistics (3PL) providers and warehouse management systems (WMS). The inventory management suite of products include Oracle Fusion Receiving, Oracle Fusion Inventory Management, and Oracle Fusion Shipping.

The following figure illustrates how Inventory Management integrates with 3PL and WMS systems. The subsections following the figure provide more detail for this integration.

High-level overview of Inventory Management integration
with 3PL and WMS systems

Receiving Integration

Receiving integration addresses the following points:

  • Sends a receipt advice to the WMS for the various documents, such as purchase order (POs), advanced shipment notices (ASNs), and return material authorizations (RMAs).

  • Receives and processes receipt confirmations to acknowledge the receipt of material, updates the source documents and on-hand details for quantities and other related information, such as lots, serials, and external packing units, and the return of rejected material.

Shipping Integration

Shipping integration addresses the following points:

  • Sends the shipment requests to the WMS for the various documents, such as sales orders and transfer orders.

  • Receives and processes shipment confirmations to acknowledge the shipment of material and updates the source documents.

  • Updates the on-hand details for quantities and other related information, such as lots and serials and splitting of the unfulfilled portions.

Inventory Management Integration

Inventory Management integration addresses the following points:

  • Receives and processes various inventory transactions that can happen within a WMS that might affect the material location and on-hand details. Such inventory transactions include adjustments, miscellaneous receipts and issues, and transfers.

  • Receives and processes inventory balance updates for solving inventory reconciliation challenges.

Inventory Management Integration with 3PL and Warehouse Management Systems Process Flow

Oracle Fusion Inventory Management integration with third-party logistics (3PL) and warehouse management systems (WMS) provides you the ability to outsource part or all of your supply chain management functions.

Using this integration, you can:

  • Improve customer service by minimizing total delivery time and costs using a 3PL provider

  • Improve visibility to expected shipment and receipt detail to better plan import and customs clearance by way of web service payloads

  • Accept returns from your customers with authorization from the manufacturer by way of receipt advices

  • Maintain tighter controls between Inventory Management and the execution system for greater transparency for 3PL or WMS activities

  • Monitor inventory accuracy

The following figure shows a high-level overview of this integration process flow. Details of this flow are provided following the figure.

Inventory Management integration with 3PL and WMS
systems process flow, diagram of

The web service Send Receipt Advice, available by way of Oracle Fusion Receiving, enables Inventory Management to communicate expected shipment lines sent to and received by a 3PL system or WMS. Then, the 3PL system or WMS, by way of the Receive Receipt Confirmation web service in Receiving, communicates confirmation and receipt details of the expected shipment lines.

The web service Material Shipment Line, available by way of the GenerateShipmentRequest operation in Oracle Fusion Shipping, enables inventory management users to send shipment requests to a 3PL system or WMS. The 3PL system or WMS can accept and confirm the shipment requests by way of the CreateandConfirm operation on the Material Shipment web service in Shipping.

Also, within Shipping, you can use the tasks in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering so that you can send a shipment request directly from the Inventory Management work area. Additionally, when shipment confirmation errors occur from the 3PL system or WMS, you can select a task in the Inventory Management work area to view the error in a spreadsheet, correct the error, and reprocess the shipment. This action brings the confirmation details into the shipping tables.

The web service Inventory Transaction Manager enables you to receive material transaction updates made by the 3PL system or WMS to keep on-hand balances synchronized with Inventory Management.

Supported Roles for Inventory Management Integration with 3PL and WMS Systems

The features for Inventory Management integration with 3PL and WMS systems are predefined, and you can access them through the following existing job roles:

  • Warehouse manager

  • Receiving and inspection manager

  • Shipping manager

The users roles associated with this feature are:

  • Warehouse operator

  • Receiving agent

  • Shipping agent

Implementation Decision Points and Setup Best Practices for 3PL and Warehouse Management Systems Integration

Oracle provides services required to integrate Oracle Fusion Inventory Management, Oracle Fusion Receiving, and Oracle Fusion Shipping to a third-party logistics (3PL) provider or external warehouse management system (WMS). These product areas work together cohesively to support transfer orders, inventory transactions, reconciliation of inventory balances, and so forth.

Decision Points

Before implementing your external systems integration, consider the following points.

  • If you plan to receive material using a 3PL provider or WMS, then use the predefined scheduled processes to generate a receipt advice.

  • If you plan to ship material using a 3PL provider or WMS, then use the predefined scheduled processes to generate shipment requests.

Setup Best Practices

The following setup best practices are recommended before integrating with external systems.

  • Use a 3PL provider or WMS at the inventory organization level. By representing the 3PL provider or WMS as an inventory organization, virtual tracking and visibility of inventory at the 3PL or WMS location is available to users in real time.

  • For simplicity, set up a receiving subinventory and one subinventory for each material status used in the implementation of Oracle Fusion Inventory Management. For example, you might set up subinventories for receiving, quality assurance, rejected, and available inventory.

  • Use security rules to control access to transactions performed in the 3PL or WMS organization.

Additional Considerations

Keep in mind the following additional considerations when planning your 3PL or WMS implementation.

  • Don't track locator and packing unit information because this data isn't tracked in Inventory Management.

  • Process inventory transactions only when the item status has changed or the item is received into or issued out of Inventory Management. For example, when a third party performs material transactions within locations or packing units at their facility, these transactions aren't tracked in Inventory Management.

  • Track inventory transactions for lot and serialized items in Inventory Management. This tracking is a requirement when lot and serialized items are issued out of inventory to support install base and product genealogy.

Receipt Advice and Receipt Confirmation Processes for External Systems Integration

This topic describes the receipt advice and receipt confirmation integration flow between Oracle Fusion Inventory Management and external systems, such as third-party logistics (3PL) and warehouse management systems (WMS).

Inventory Management communicates receipt advices to the 3PL system or WMS for processing. After completion of the processing in the 3PL system or WMS, Inventory Management accepts the receipt confirmations from the 3PL system or WMS.

For receiving, the web service Send Receipt Advice enables Inventory Management to communicate expected shipment lines to be received by a 3PL system or WMS. Then the Receive Receipt Confirmation service enables the 3PL system or WMS to communicate confirmation and receipt details of the expected shipment lines that were communicated with the Send Receipt Advice web service.

The following figure shows this flow.

Receipt advice and receipt confirmation process
flow for 3PL and WMS integration

Explanation of callouts:

  1. The scheduled process Generate Receipt Advice publishes an event to notify the 3PL system or WMS that receipt advices are ready to be interfaced. The web service Send Receipt Advice provides the ability for the 3PL system or WMS to receive the actual receipt advices with the expected shipment lines for purchase orders (POs), transfer orders, and return material authorizations (RMAs).

  2. After the 3PL system or WMS receives the receipt advices, the 3PL system or WMS performs receiving-related processes including receiving, inspection, and put away.

  3. The web service Receive Receipt Confirmation is initiated, and receipt confirmation is sent to Inventory Management. This web service provides the ability for the 3PL system or WMS to send the material and receiving details for the expected shipment lines received. This service also interprets and transforms the message, and creates the necessary records in Inventory Management. These records carry all the reference information from the external system to easily identify them for performing any future returns or corrections.

  4. Inventory Management validates and processes the receiving transactions by processing the receipt confirmation messages and by updating the release status and integration status.

You can use the scheduled process Manage Receiving Transactions to automatically validate and process the transactions received. If an error occurs while processing the transactions, you can review and correct pending and error transactions using the Review Receipts Interface task in the Inventory Management work area, and resubmit the transactions for processing. When the transactions have successfully processed, the associated document is updated accordingly. For example, the status on an associated purchase order document is updated to Closed for Receiving.

You can use the scheduled process Generate Changed Receipt Advice to manage changes. For example, if there was a change to a purchase order line that was already interfaced but not confirmed, the service sends a changed receipt advice to communicate the associated change to the 3PL system or WMS.

You can use the Receive Expected Shipments page in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering to perform receiving of expected shipment lines to record various details, such as integration status. Integration status values include Ready to Interface, Interfaced, and Confirmed.

.

Shipment Request and Shipment Confirmation Processes for External Systems Integration

This topic describes the shipment request and shipment confirmation flows between Oracle Fusion Inventory Management and external systems, such as third-party logistics (3PL) and warehouse management systems (WMS).

The following figure shows this flow.

Shipment request and shipment confirmation processes
for external systems integration

Explanation of callouts:

  1. The outbound shipment request integration process between Oracle Fusion Inventory Management and a 3PL system or WMS starts with a shipment request. The scheduled process Generate Shipment Request enables inventory management users to manually send shipment lines to the 3PL system or WMS using the task Create Outbound Shipment request in the Shipping UI, or they can automate the process using a scheduled process. The shipment request service Material Shipment Line uses the existing pick wave release rules to provide the criteria for selecting the shipment lines.

    Alternatively, the 3PL system or WMS can initiate the shipment request service voluntarily at specified intervals to retrieve shipment requests from Inventory Management.

  2. After the 3PL system or WMS receives the shipment request, the pick, pack, and ship processes are performed.

  3. The web service Material Shipment, when initiated with the required input, receives and processes the shipment confirmation messages. This service interprets and transforms the message, and creates the necessary records in the shipping open interface tables. This transformation provides the mechanism for the 3PL system or WMS to send the material and shipping details for the shipment lines fulfilled.

The scheduled process Perform Shipping Transactions processes the pending transaction records received into the open interface tables. The process validates the data on the transaction records received from the 3PL system or WMS before processing them. Any errors from the validation step are recorded, and the transaction records remain in the open interface tables. The interface records with errors are available for users to view, edit, or resolve the errors, or reprocess.

In the event an error occurs while processing the shipment confirmation messages, users can access the Manage Shipping Transaction Corrections in Spreadsheet task to manage pending transactions by way of a spreadsheet interface using Application Development Framework Desktop Integration (ADFdi) technology. This interface supports management of interface transactions and corresponding errors related to shipment confirmations received from 3PL system and WMS. You can access this task in the Inventory Management work area of the Manufacturing and Supply Chain Materials Management offering.

After the shipment lines are successfully confirmed, the integration status and shipment status are updated accordingly.

Inventory Transaction Processes for External System Integration

All internal material transactions that occur within a third-party logistics (3PL) or warehouse management system (WMS) must be integrated appropriately to keep the inventory picture accurate in Oracle Fusion Inventory Management.

You can use the web service Transaction Manager to maintain inventory accuracy in Inventory Management with the 3PL system or WMS for the following:

  • Miscellaneous account alias issues and receipts

  • Subinventory transfers

  • Interorganization transfers

  • Cycle count adjustments

  • Physical inventory adjustments

  • Material status updates

This service inserts data into the applicable transaction interface tables and calls the transaction manager to process the rows that are ready for processing. If the transaction manager completes successfully, you can view the completed transaction on the Review Completed Transactions page. If the transaction processing fails, you can view the error details as well as transaction data on the Manage Pending Transaction page. From this page, you can correct the data and resubmit to the manager for reprocessing. You can access these pages in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering.

Inventory Balances Integration with External Systems

Using Oracle Fusion Inventory Management's inventory balances integration capabilities, you can outsource warehousing and manufacturing processes to efficiently lower costs, service local markets, reduce cycle times, and so on.

A central integration framework across Oracle Purchasing Cloud, Oracle Fusion Order Management, and Inventory Management tracks interactions between the various external systems. You can receive inventory balance details from external systems, such as third-party logistics providers, warehouse management systems, or contract manufacturers and use this information to reconcile inventory balances. Inventory on-hand details can include subinventory, locator, lot, serial number, and external packing unit.

The inventory balances integration feature enables you to:

  • Use the Inventory Balance Transactions service to post inventory balance messages from an external system

  • Import inventory balance messages in bulk using a SaaS spreadsheet

  • Enable users to resolve any processing exceptions

  • Purge inventory balance messages periodically

Note: This feature is automatically available and is included with the shipped job roles (warehouse manager and inventory manager).

Use the following processes and task to interface with external systems to improve tracking and visibility across your supply chain, including partners:

  • Manage Inventory Balances Processes

  • Manage Inventory Balance Messages in Spreadsheet (ADFdi)

  • Manage Inventory Transaction Process

  • Purge Inventory Balance Messages Process

Manage Inventory Balances Process

This scheduled process processes the imported inventory balance messages in the interface tables.

Manage Inventory Balance Messages in Spreadsheet (ADFdi)

Use this task, in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering, to review and resolve any exceptions while processing the inventory balance messages.

Manage Inventory Transaction Process

This scheduled process processes the necessary adjustment transactions to reconcile the inventory balances.

Purge Inventory Balance Messages Process

Use this scheduled process to purge the historical balance inventory messages collected over time in the interface tables. Using the processing status parameter, you can purge error, successful, or all messages between a date range.

FAQs for Integrating with 3PL and Warehouse Mangement Systems

Can I synchronize master data with third-party logistics or warehouse management systems?

Yes. Oracle Fusion Product Hub, Oracle Fusion Purchasing, and the Oracle Sales Cloud integration solutions work together to provide integration capabilities to support automated integration for items, suppliers, and customers.

Min-Max Planning

When setting up min-max planning for Oracle Fusion Inventory Management, create classifications to categorize items. You associate categories with similar item attributes with a classification. Categorizing items with similar attributes enables you to specify the policies for computing the min-max quantities efficiently.

For example, based on item cost, you can define classifications as high cost, medium cost, or low cost. You can then associate all of the categories that contain high cost items to a classification called high cost.

You define all of the classifications under the Default classification group, which acts as a placeholder for all of the classifications. After creating classifications, you associate them with policy profiles at the organization and subinventory levels using the Manage Min-Max Planning Policy Profile Assignments task

Note: You cannot create a classification group. You can only define classifications under the Default classification group.

Classification Criteria

After you create a classification, specify the category that you want to add to the classification. You associate the classification to a classification criterion called Category. You then define the criterion value for the Category by using one of the following conditions:

  • Starts with: Group multiple categories with a single classification

  • Equals: Specify the exact category

  • Contains: Specify a criteria value the category may contain

  • Among: Specify a range of categories

Create a classification and associate it with a classification criterion.

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage Min-Max Planning Classification Groups

  2. On the Manage Min-Max Planning Classifications Groups page, in the Specify Classification section, click the + button to add a new row and specify a classification name and description.

  3. In the Specify Classification Criteria section, click the + button, and do the following:

    1. In the Condition column, select a condition.

    2. In the Criteria Values column, click the Edit icon to specify the criteria.

A policy profile in Oracle Fusion Inventory Management represents a set of rules that define how min-max planning will calculate quantities.

Create policy profiles to define the policy parameters for min-max planning. Policy parameters refer to a set of attributes for the minimum, maximum, and Economic Order Quantity (EOQ) quantities. These attributes define how the calculation program for the inventory policies calculates the min-max quantities to maintain the inventory levels.

Policy profiles work in conjunction with the classifications that you define for min-max planning. After creating a policy profile, you assign the policy profile to a classification using the Manage Min-Max Planning Policy Profile Assignments task. A policy profile can be assigned to a classification at the organization and subinventory levels. You can define one policy profile and assign it to multiple classifications.

Minimum Quantity

Minimum quantity is the inventory level quantity below which min-max planning suggests a replenishment order to bring the inventory level back to the maximum quantity. When creating policy profiles, you must define the Default Safety Stock Days of Cover attribute on the Create Min-Max Planning Policy Profile page. Min-max planning uses the Default Safety Stock Days of Cover attribute to calculate the minimum quantity.

Maximum Quantity and EOQ

Maximum quantity is the inventory level up to which min-max planning recommends a replenishment order. When you specify the maximum quantity value, the inventory level does not exceed that value. When creating policy profiles, you must define the Maximum Quantity Calculation Method attribute on the Create Min-Max Planning Policy Profile page. Min-max planning uses the Maximum Quantity Calculation Method attribute to calculate the maximum quantity.

Additionally, you can define the EOQ attributes to calculate the EOQ and minimize the combined costs of acquiring and carrying the inventory.

Create policy profiles.

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage Min-Max Planning Policy Profiles

  2. On the Manage Min-Max Planning Policy Profiles page, click the + icon.

  3. On the Create Min-Max Planning Policy Profile page, do the following:

    • Enter a policy name and description.

    • Specify the required attributes in the Minimum Quantities, Maximum Quantities, and EOQ Calculation Inputs sections.

  4. Click Save.

Policy profiles contain the input policy parameters to calculate the min-max quantities. Assigning policy profiles is the final step in setting up min-max planning for Oracle Fusion Inventory Management. After creating policy profiles, you assign policy profiles to classifications at the organization and subinventories levels. You can assign a policy profile to multiple organizations and subinventories, and to multiple subinventories under the same organization. If you do not specify a subinventory, min-max planning calculates the inventory policies at the organization level only.

Define policy profile assignments.

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage Min-Max Planning Policy Profile Assignments

  2. On the Edit Policy Profile Assignments: Default page, click the + icon to add a row.

  3. In the Classification column, select a classification for the row you added.

  4. In the Organizations column, click the Edit icon to add organizations.

    You can add multiple organizations.

  5. In the Subinventories column, click the Edit icon to add subinventories.

    You can add multiple subinventories.

  6. In the Policy Profile column, select a policy profile for the row you added.

  7. Click Save.

Managing Policy Profiles

When associating a policy profile with a classification at the organization and subinventory levels, you can view and edit the parameters of the policy profile. It is recommended that you review the parameters of a policy profile before assigning it. You can also edit the policy parameters before making the assignments.

To view or edit the parameters of a policy profile:

  1. In the Manage Min-Max Planning Policy Profile Assignments task, select an assignment row.

  2. Click the Manage Policy Profile button.

Calculating Min-Max Planning Policy Parameters

After setting up the classifications, policy profiles, and policy profile assignments for min-max planning, you can calculate the min-max policy parameters. You can run the Calculate Min-Max Planning Policy Parameters scheduled process from the Manage Min-Max Planning Policy Profile Assignments task for one or more classifications.

To calculate the policy parameters:

  1. In the Manage Min-Max Planning Policy Profile Assignments task, select the Calculate Policy Parameters check box corresponding to a classification row.

  2. Click the Calculate Min-Max Planning Policy Parameters button.

How Classifications Work with Policy Profiles and Policy Profile Assignments in Min-Max Planning

Min-max planning in Oracle Fusion Inventory Management enables you to maintain the inventory levels by specifying the minimum and maximum quantities for an item. When the inventory level falls below the minimum quantity that is defined for an item, min-max planning recommends a replenishment order to bring the inventory level back to the maximum quantity. You define reusable replenishment profiles that help the calculation program for the inventory policies to calculate the min-max quantities.

Here's how to calculate the min-max quantities for an item using min-max planning:

  • Create classifications to associate items or item categories that have similar attributes.

  • Create policy profiles to define the policy parameters.

  • Assign policy profiles to classifications.

  • Run the Calculate Min-Max Planning Policy Parameters scheduled process.

Note: If you're using process manufacturing, min-max plans the primary items and any associated co-products. This can result in possibly exceeding the maximum quantity for an item. You can get around this by planning only one product at a time.

Classifications

Create classifications under the Default classification group to associate categories with similar item attributes to a classification. You then associate the classification to a category by specifying the classification criterion.

In the Setup and Maintenance work area, use the Manage Min-Max Planning Classification Groups task to create a classification:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Min-Max Planning Classification Groups

Policy Profiles

Policy profiles enable you to specify the policy parameters to calculate the min-max quantities. Each policy profile acts as a placeholder, which contains a set of policy parameters.

In the Setup and Maintenance work area, use the Manage Min-Max Planning Policy Profiles task to create policy profiles:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Min-Max Planning Policy Profiles

Policy Profile Assignments

Policy profiles assignments enable you to assign policy profiles to classifications at the organization and subinventories levels.

In the Setup and Maintenance work area, use the Manage Min-Max Planning Policy Profile Assignments task to set up policy profile assignments:

  • Offering: Manufacturing and Supply Chain Materials Management

  • Functional Area: Inventory Management

  • Task: Manage Min-Max Planning Policy Profile Assignments

Calculate Min-Max Planning Policy Parameters Scheduled Process

Run the Calculate Min-Max Planning Policy Parameters scheduled process to compute the min-max quantities at the item organization or item subinventory level.

The min-max quantities are calculated at the item organization level when you:

  • Associate one or more categories with a classification.

  • Assign a policy profile to the classification at the organization level.

  • Set the Inventory Planning Method to Min-max planning in the Specifications tab of an organization using the Manage Items task. The Manage Items task is in the Product Information Management work area.

The min-max quantities are calculated at the item subinventory level when you:

  • Associate one or more categories with a classification.

  • Assign a policy profile to the classification at the subinventory level.

  • Select the Min-Max planning check box at the item subinventory level using the Manage Subinventories and Locators task. The Manage Subinventories and Locators task is in the Setup and Maintenance work area.

FAQs for Min-Max Planning

Yes. If you're using process manufacturing, min-max plans the primary items along with any associated co-products. This can result in possibly exceeding the maximum quantity for an item.

For example, let's say your company places two process manufacturing work orders which can produce multiple products. Work Order 1 contains product A with a requested quantity of 1000 and a maximum quantity of 5000. Work Order 1 also contains co-products B and C with requested quantities of 500 each. Work Order 2 contains product B with a requested quantity of 2000 and a maximum quantity of 2000. Work Order 2 also contains co-products C and D with requested quantities of 750 each.

In this scenario, the total requested quantity for product B is 2500 (500+2000=2500) and the maximum quantity is 2000. This can happen when running replenishment planning for products A and B in a single replenishment run. You can get around this by planning only one product at a time.

PAR Replenishment

Overview of PAR Replenishment

Periodic Automatic Replenishment (PAR) includes the use of PAR locations and PAR levels. A PAR location is a stock area from which you can take consumable items. Organizations, such as hospitals and clinics, use PAR Locations to manage supplies needed to support medical procedures and patient care. The PAR level is the optimum level of stock needed for items in that PAR location. In addition to determining the best level of stock for items in an inventory area, the PAR level also defines the level at which to replenish stock.

Typically, there are two types of PAR locations:

  • Quantity Tracked: For controlled or more valuable types of materials. Use quantity tracked to dispense and issue the items in a controlled manner.

  • Non-Quantity Tracked: For important but lower value materials (or bulk supplies). Use non-quantity tracked for supplies that you count and replenish to predetermined levels at various intervals. Examples include gauze, syringes, test kits, gloves, and so forth.

We can break down PAR location management into five categories:

  • Define: Set-up and maintain PAR locations within a facility and define rules about how to count and replenish the materials in the location.

  • Count or Issue: Count PAR locations that aren't quantity tracked (i.e expensed) or capture the issue and dispensing of materials that are quantity tracked.

  • Replenish: Replenish materials in PAR locations from suppliers or the stockroom or warehouse.

  • Optimize: Account and record replenishment transactions. Configure subledger accounting including setting up mapping sets and account.

  • Account and Record: Account and record replenishment transactions. Configure subledger accounting including setting up mapping sets and account.

A PAR location is a stock area from which items are consumed.

We model PAR locations as subinventories. Your PAR location can be an area, closet, shelf, or cart. You may have only a few, or you may have hundreds of locations to define and manage. You may also have multiple facilities (organizations) with hundreds of PAR locations.

You must give your PAR location a name and associate it with an inventory organization.

Set up a PAR location using the Manage Subinventories and Locators task in the Setup and Maintenance work area.

Update these fields when defining a PAR location:

  • Location

  • PAR location

  • Replenishment count method

  • Default replenishment count type

  • Quantity tracked

  • Replenishment source

  • PAR settings

Location

Use the Location to specify the ship-to-detail associated with the PAR location. The location details specify where to deliver the requested material to their final destination.

PAR Location

Select this check box to configure the subinventory as a PAR location. Enabling this setting lets you select the Replenishment Count Method and Default Replenishment Count Type. You can enable this option whether or not the subinventory is quantity tracked or non-quantity tracked.

Replenishment Count Method

The following table lists possible values for the replenishment count method.

Count Method Description

Two Bin

A visual indicator indicating that materials are running low.

The location is scanned to indicate that material needs replenishing. The application reorders the standard quantity or PAR quantity.

The replenishment request is for all items in the location (bin) in PAR quantity and PAR UOM. For Two bin, the Default Replenishment Count Type field defaults with a value of Order PAR.

Request

Indicates that you want to enter the requested quantity.

The application creates the replenishment for the given quantity for the PAR location item.

Count

Indicates that you will enter a count to specify what the current quantity is in the PAR location.

When you select Count as the replenishment count method, you must enter a value in the Default Replenishment Count Type field.

Default Replenishment Count Type

The default replenishment count type indicates the count type for the PAR location.

The following table lists possible values for the default replenishment count type.

Count Type Description

Order PAR

Generates a replenishment requisition for the PAR level quantity or PAR maximum quantity, if specified, associated with the locator and item.

For example, if you have a quantity of 10 for the PAR level for the item locator, the reorder quantity is always a quantity of 10. If you define a PAR maximum quantity, this quantity is used for the reorder quantity.

You can't enter a replenishment count quantity when the count type is Order PAR.

On-Hand Quantity

Enter the on-hand quantity. The system compares the entered on-hand quantity with the PAR quantity and creates a replenishment request for the difference.

When you enter an on-hand quantity that's less than either the PAR level quantity or the PAR maximum quantity, the reorder quantity is the difference between the two. For example, if you enter an on-hand quantity of 15 and a PAR level quantity of 20, the reorder quantity is 5.

If the on-hand quantity exceeds the PAR level quantity, the reorder quantity is zero.

In the event that the PAR maximum quantity is defined, the reorder quantity is the difference between the PAR maximum quantity and the on-hand quantity.

Order Quantity

Generates a replenishment requisition for the order quantity entered for the replenishment count.

For example, if you enter an order quantity of 50 and a PAR level quantity of 20, the reorder quantity is 50, and inventory doesn't take the PAR level quantity or the maximum quantity into consideration.

Quantity Tracked

When creating a PAR Location you must determine whether or not the PAR location is quantity tracked or non-quantity tracked. Typically, you classify subinventories as non-quantity tracked for PAR replenishment. However, you can also configure PAR locations as quantity tracked.

When a PAR location is quantity tracked, this indicates that each transaction updates the on-hand quantity. In this case, the Quantity Tracked check box is selected by default. In order to deselect the Quantity Tracked check box, you must first change the material status associated with the subinventory. Then, you can update the Quantity Tracked check box on the Manage Subinventories page.

Note: The Quantity Tracked check box is only enabled when the associated material status has a value of Active:Not Available for Netting, ATP, and Reservations.

Replenishment Source

Define the replenishment source using the Sourcing section. You can define your sourcing details at various levels starting with the item subinventory, subinventory, inventory item, and inventory organization levels.

The sourcing documents include:

  • Purchase requisition (purchase order)

  • Interorganization Internal Material Transfer

  • Intraorganization Internal Material Transfer

  • Movement Request

PAR Settings

Finish defining your PAR locations by completing the PAR Settings section.

PAR settings include:

  • Replenishment count type

  • PAR level

  • PAR maximum quantity

  • PAR level UOM

  • Count tolerance percentage

  • Count required

    (You define the count required at the item locator level only.)

You have the option to configure PAR parameters at the item subinventory or item locator level. The level at which you chose to specify your PAR settings depends on how you store and count your items.

These settings include:

  • PAR level

  • Par level UOM

  • Replenishment count type

  • PAR maximum quantity

  • Count required

  • Count tolerance percentage

PAR Level

The level at which the quantity is restocked. If the count falls below this quantity, and a PAR maximum quantity has not been specified, the PAR level calculates the reorder quantity.

PAR Level UOM

The PAR level unit of measure associated with the item.

Replenishment Count Type

The replenishment count type values include Order PAR, On-Hand quantity, and Order Quantity. If you do not specify a value for the Replenishment Count Type, the application uses the default replenishment count type specified for the subinventory.

PAR Maximum Quantity

This value is used to recalculate the reorder quantity if the count falls below the PAR level. If you do not specify a PAR maximum quantity, the application uses the PAR level.

Count Required

A check mark in this field indicates that the item in the PAR location must be counted. You define this setting at the item locator level only.

Count Tolerance Percentage

The percentage that the count can exceed the PAR maximum quantity.

Periodic Automated Replenishment (PAR) enables facilities that do not store perpetual inventory (such as hospitals) to perform locator-level replenishment. With PAR location management, organizations can perform locator-level stock counting for both quantity and non-quantity tracked subinventories. If the stock level falls below the target on-hand quantity for the locator, inventory generates the appropriate replenishment document based on the item sourcing for the subinventory.

Considerations

Consider the following when setting up PAR location management:

  • You have the option to configure PAR parameters at the item subinventory or item locator level. The level at which you chose to specify PAR parameters depends on how you store and count your items. This determines the level to setup the PAR replenishment related attributes.

  • Determine if the PAR location will be quantity tracked or non-quantity tracked. Typically, PAR locations are non-quantity tracked. However, there can be cases where the PAR location is quantity tracked.

Set Up

To set up PAR location management:

  1. Define the ship-to location associated with the PAR location.

    In the Setup and Maintenance work area, use the Manage Locations task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Inventory Management

    • Task: Manage Locations

    The location you define represents the Deliver-to Location on the final put away or deliver transaction.

    Define these details for the PAR location:

    • Location Name

    • Location Code

    • Main Location Address

    • Ship-to-Location (for replenishment)

  2. Set up PAR locations.

    1. In the Setup and Maintenance work area, use the Manage Subinventories and Locators task:

      • Offering: Manufacturing and Supply Chain Materials Management

      • Functional Area: Inventory Management

      • Task: Manage Subinventories and Locators

      PAR locations are modeled as subinventories.

      Fields that you need to enter when defining a PAR location include:

      • Subinventory Name

      • Subinventory Description

      • Subinventory Type

      • Location

      • PAR Location check box

      • Replenishment Count Method

      • Default Replenishment Count Type

      • Sourcing

      • PAR Settings

    2. Select the PAR location check box to configure the subinventory as a PAR location.

      You can enable the PAR Location check box regardless of whether the subinventory is quantity tracked or non-quantity tracked. You must select this check box in order to enable PAR level counting.

    3. Once you have selected the PAR location check box, you can choose the Replenishment Count Method and Default Replenishment Count Type.

      Replenishment Count Methods include Two Bin, Request, and Count.

    4. When you select Count as the Replenishment Count Method, you must enter a value in the Default Replenishment Count Type field.

      Values include Order PAR, On-Hand Quantity, and Order Quantity.

    5. Define the replenishment source using the Sourcing region of page. You can define your sourcing details at various levels starting with the item subinventory, subinventory, inventory item, and inventory organization levels.

      The sourcing documents include:

      • Purchase requisition (purchase order)

      • Interorganization internal material transfer

      • Intraorganization internal material transfer

      • Movement request

    6. Finish defining your PAR locations by completing the PAR settings region of the page.

      Settings include:

      • Replenishment Count Type

      • PAR level

      • PAR Maximum Quantity

      • PAR level UOM

      • Count Tolerance Percentage

      • Count Required check box

  3. The final step in the PAR replenishment process is to account and record the transaction.

    You can account and record PAR transactions using subledger accounting. You can configure accounting rules to transform subledger transactions into detailed subledger journal entries automatically.

    To implement subledger accounting for a PAR location you must first create a mapping set. Mapping sets provide an efficient way to define a segment or account combination value for one or more transaction or reference attribute values.

PAR Location Counts

You can replenish a PAR location by counting and recording its quantity. The frequency of counting of a PAR location depends on the criticality and turnover of items in the PAR locations. You can count PAR locations multiple times per day (like at the end of every shift), or on a daily, weekly, or as-needed basis.

You can use different ways to count and react to the consumption of items in a PAR location. The count method that you define on the PAR location determines the counting method. This table shows the available count methods:

Count Method Description

Two Bin

Simple visual indicator that the materials are running low. Scan just the location to indicate that material needs replenishing.

You can reorder the standard quantity or PAR quantity. When using one bin, a new bin replaces it (no counting).

Use the Order PAR replenishment count type to always replenish the whole bin.

Request

You request an order for the item and enter the quantity to order. Use the Order Quantity replenishment count type.

The application creates the replenishment for the given quantity for the PAR location item.

Count

You enter a count to specify the current quantity in the PAR location. If the count is below the PAR quantity, the application creates a replenishment order for the PAR quantity to bring the location back to the proper stocking level.

You can use any replenishment count type with this option. When you select Count as the replenishment count method, you must enter a value in the Default Replenishment Count Type field.

Counting is a two-part activity:

  1. You count the items in the PAR location and enter the quantity. Note that this could be a simple two bin action to swap bins in the location.

  2. You indicate that the count is complete and send the quantities back to the application. The application generates the required replenishment requests based on your defined PAR location count and replenishment options.

The table shows the supported replenishment count methods and count types:

Replenishment Count Method Replenishment Count Type Quantity Mandatory in Replenishment Request Replenishment Request

Two Bin

(Replenish the complete PAR location or a specific PAR location item.)

Not applicable

No

Count quantity isn't sent in the replenishment request. You can only send details of organization and PAR location. Generates replenishment for all items in the PAR location with the reorder quantity set to PAR Quantity.

Request

(Create a specific quantity for a PAR location item.)

Not applicable

Yes

You must provide the count quantity in the replenishment request. Replenishment is created for the given quantity for the PAR location item.

Count

(Count and specify the current quantity. The replenishment request is created based on PAR location item setup.)

Supports three different replenishment count types:

  • Order PAR: create replenishment request for the PAR level. For example, if the PAR level is 5 and a replenishment order is requested, it will be for order quantity of 5.

  • Order Quantity: create replenishment request for the quantity entered by the user. For example, if the PAR quantity is 20 and the you enter and order a quantity of 30, the order will be for a quantity of 30.

  • On-Hand Quantity: compare the given quantity with the PAR quantity (along with other conditions like reasonableness) and create a replenishment for the difference. For example, if the PAR count quantity is 15 and the PAR level is 20, the replenishment order will be for a quantity of 5.

Yes

You must provide the count quantity in the replenishment request. Replenishment is done depending on the replenishment count type at the PAR location item level.

PAR Location Replenishment

The replenishment process considers the PAR location definition and uses the count options, requested quantity, current on-hand level, and any in-process requests to create an appropriate replenishment request. The replenishment request takes the form of a purchase requisition or warehouse request. The supplier or the warehouse fills the request and delivers the material to the PAR location.

After submitting counts for a PAR location, a replenishment process performs these steps:

  • Evaluates each item in the count to determine the amount to replenish and the type of replenishment.

  • Considers the PAR location replenishment count type to determine the order quantity.

  • Uses the PAR location unit of measure if there is no provided count unit of measure.

  • Evaluates existing demand and supply for the item in that particular PAR location to determine how much to order. This is similar to min-max replenishment.

  • Checks for the reasonableness of the request to avoid miss-keys of an order quantity that could create requests for unintended large orders.

Sourcing details define the replenishment source. You can define the sourcing details at various levels of granularity starting with the item subinventory.

The levels include:

  • Item subinventory level

  • Subinventory level

  • Inventory item level

  • Inventory organization level

This table shows the supported replenishment source types.

Sourcing Document Sourcing Type Sourcing Organization Sourcing Subinventory

Purchase Requisition and Purchase Order

Supplier

Not applicable

Not applicable

Interorganization Internal Material Transfer

Organization

Enter the source inventory organization from where to replenish the material.

Optionally, enter the source subinventory from where to replenish the material.

Intraorganization Internal Material Transfer

Organization

Enter the same inventory organization that you logged in with.

Enter the source subinventory from where to replenish the material.

Movement Request

Subinventory

Organization automatically defaults.

Enter the source subinventory from where to replenish the material.

PAR Accounting and Recording

The final part of the PAR replenishment process is to account and record the transaction.

Cost Management subledger accounting provides rules that you can configure to automatically transform subledger transactions into detailed subledger journal entries. You can define flexible rules for accounting policies and generate accounting for legal and corporate reporting. Reconciling accounting to transaction data enables drill down from general ledger to the underlying subledgers and standard reports.

The first step in implementing subledger accounting for a PAR location is to create a mapping set. Mapping sets provide an efficient way to define a segment or account combination value for one or more transaction or reference attribute values. Using such input and output mappings is simpler than using complex conditions on account rules. Based on the value of the source input, you can derive a single segment or a full account. Examples of source input value types include transaction attributes and reference attributes.

The next step is to create an account rule on the Edit Account Rule page. You can use mapping sets to associate a specific output value for an account or segment. You can use mapping sets in the account rules to build the account. Use the account rules to determine the accounts for subledger journal entry lines. In addition, you can specify the conditions under which these rules apply. Using these capabilities, you can develop complex rules for defining accounts under different circumstances to meet your specific requirements. You can define account rules for an account, segment, or value set.

Example of PAR Replenishment Accounting and Recording

Let's look at an example to see how with an input source of PAR Location, we can derive the output type account combination.

Let's create a mapping set:

  1. Navigate to the Manage Mapping Sets task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Receipt Accounting

    • Task: Manage Mapping Sets

  2. On the Edit Mapping Sets page, once you establish the input source, select the chart of accounts. In our example, let's say you select the chart of accounts of 102_Operations Accounting.

  3. Map the input source of PAR Location to the output source of 102_Operations Accounting.

  4. Select Yes for input source PAR Location and select a specific account code combination for the output type.

Let's create the account rule:

  1. Navigate to the Manage Account Rules task:

    • Offering: Manufacturing and Supply Chain Materials Management

    • Functional Area: Receipt Accounting

    • Task: Manage Account Rules

  2. In the Rules region of the Edit Account Rule page, enter Mapping Set for the value type. This indicates to derive the account combination by referencing the mapping set. The account combination from the chart of accounts is specified using the mapping set.

  3. In the account rules, you can specify conditions for each rule detail line. Priorities determine the order in which to examine the account rule conditions. When a condition is met, the rule associated with that priority is used. Depending on which of the defined conditions is met, a different account rule detail is employed to create the account. The Create Accounting process evaluates conditions based on the priority of the rule detail. When the condition is met, the rule detail is applied.

Two Bin Replenishment

Hospital environments use two bin inventory control systems to determine when to replenish items. It's effective to use this type of inventory control method primarily for small or low-value items.

For example, when a hospital depletes items in the first bin (working stock), the replenishment clerk creates an order to refill or replace these items. The second bin should have enough items to last until the placed order arrive. The first bin has a minimum of working stock and the second bin keeps reserve stock or the remaining material.

Once the hospital worker depletes the first bin in front, he places the empty bin on the top shelf. The empty bin serves as a visual indicator to the replenishment clerk to order additional material to replenish the empty bin. Since the count method is Two Bin, you don't need to enter an actual count. The two bin method automatically replenishes the item to the PAR level.

Once the replenishment clerk processes the replenishment request and receives the new material, the replenishment clerk places the new bin behind the existing bin. This ensures that the hospital uses the material in a first-in first-out approach.

Example of a PAR Replenishment Purchase Requisition

To generate a purchase requisition in Procurement, you must complete the necessary setups at the subinventory and item subinventory levels. Additionally, you can create a location and associate it with the PAR subinventory. After running the replenishment process you can review the supply order details and requisition lines. Then, you can generate a purchase order, receive the order, and put away the receipt line.

Scenario

This example of a PAR replenishment purchase requisition covers these steps:

  • Define location

  • Create subinventory

  • Associate item to a subinventory

  • Run Replenish Inventory Request REST service

  • Process Supply Chain Orchestration Interface process

  • Review supply details

  • View requisition lines

  • Generate purchase orders

  • Receive expected shipments

  • Put away lines

This table describes each step in the example for a PAR replenishment purchase requisition.

Step Description

Define location

First, define the location to serve as your final deliver-to location when performing the deliver or put away transaction. Use an address naming convention that allows receiving personnel to route the material to the appropriate replenishment location. Use the Manage Locations page to set up the location.

Next, configure the subinventory to serves as the PAR location you intend to replenish. You must enable the PAR Location check box for the subinventory. Also, specify the Replenishment Count Method and Default Replenishment Count Type. You can also associate a location to the subinventory.

Optionally, you can create a subinventory group. A subinventory group is a grouping of subinventories that you can use to process PAR replenishment requests. For example, you can define a subinventory group consisting of five individual subinventories. You can then create a replenishment request for all five subinventories instead of creating individual replenishment requests for each subinventory.

Create subinventory

In this example, let's set up the subinventory as non-quantity tracked subinventory. In order to configure a subinventory as non-quantity tracked, set the Material Status field to Active: Not Available for Netting, ATP, and Reservations.

Once the material status is set, you can deselect the Quantity Tracked check box. In order to configure the subinventory as a PAR location, you must select the PAR location check box. By configuring the subinventory as a PAR location, you can now select the Replenishment Count Method and Default Replenishment Count Type.

Last, assign a location to the subinventory. This location represents the final deliver-to location when you put away the material receipt into inventory.

Associate item to a subinventory

Once you create the subinventory, you must associate your item to the subinventory. The sourcing region on the Add Item to Subinventory page enables you to specify the sourcing type. In this example, let's select Supplier as the source type. The source type of Supplier indicates that the replenishment request will create a corresponding purchase requisition and purchase order to replenish the material to the PAR Level for the item subinventory.

In the PAR Settings region, the Replenishment Count Type is automatically defaulted from the subinventory. In this example, the PAR Level has been set to 5 units for the item subinventory association. This means that the replenishment request will be created for 5 units. The PAR Level UOM is automatically defaulted from the item.

Run Replenish Inventory Request REST service

The Replenish Inventory Request REST service manages replenishment requests. When the REST request processes successfully, the return message text indicates the following: M1 Supply Request Batch Number: PAR8001. The process has successfully completed.

When submitting the Replenish Inventory Request REST service, you have the option to specify Yes or No for the Submit for Processing parameter. Selecting Yes indicates that the service submits the replenishment request immediately for processing. Selecting No indicates that the service doesn't submit the replenishment request immediately for processing. For those replenishment requests that aren't submitted immediately, you can use the Create Inventory Replenishment Request scheduled process to create inventory replenishment requests.

The Create Inventory Replenishment Request process supports these submission parameters:

  • Organization

  • Item

  • Subinventory

  • Subinventory group

When the replenishment request is for a requisition, the Replenish Inventory Request REST service creates a supply request batch number. The supply request batch number always has a prefix with PAR for PAR generated replenishment requests. You can use the supply request batch number when submitting the Process Supply Chain Orchestration Interface process.

Process Supply Chain Orchestration Interface process

The Process Supply Chain Orchestration Interface scheduled process creates supply orders based on the Supply Chain Orchestration interface records. To process these records, you must submit the scheduled process.

Once you enter the scheduled process parameters, you can submit the request. Let's use these values for our process parameters:

  • Supply Request System: Oracle Fusion Inventory Management

  • Organization: Enter the inventory organization that generated the PAR replenishment request

  • From Supply Request Batch Number: The batch number will always start with PAR. For example, PAR8001

  • To Supply Request Batch Number: Enter the ending batch number for a range or supply request batch numbers

  • From Supply Request Date: Starting supply request date

  • To Supply Request Date: Ending supply request date

Review supply details

When the Process Supply Chain Orchestration Interface completes successfully, you can review the supply order details by navigating to the Manage Supply Lines task. Search by the supply request reference number to review the supply lines. The supply request reference number has a prefix of PAR such as in the example PAR8001.

When reviewing the supply order details, you can review the supply lines associated with the supply order. When you click on a supply line, you can review the line details. Navigate to the Execution Documents tab to view the purchase requisition number created for the replenishment request.

View requisition lines

You can use the requisition document number displayed in the supply order details to search for the requisition in Procurement. You can navigate to the View Requisition Lines task in Procurement to view the requisition details.

Generate purchase orders

Procurement provides the ability to automatically generate a purchase order from a purchase requisition. The purchase order provides the supplier information indicating which supplier will replenish the material. The ship-to location is identified based on the location associated with the subinventory.

Receive expected shipments

Once the purchase order is in an Open status, it's available for receiving. Navigate to the Receive Expected Shipments page to perform the receipt transaction. You can search by criteria such as purchase order number, supplier, and item.

The Receipt Routing field on the purchase order schedule determines how the material is received. The default value is derived from this criteria:

  • Item definition for the ship-to organization

  • Supplier site

  • Receiving option for the ship-to organization

Receiving supports the following receipt routing methods:

  • Direct Delivery: Shipments are received into a receiving location and put away in the same transaction. Put away happens automatically upon receipt creation.

  • Standard Receipt: Shipments are received into a receiving location and then put away in a separate transaction. Standard receipts can be inspected or transferred before put away.

  • Inspection Required: Shipments are received into a receiving location and then inspected and put away in separate transactions. You can accept or reject material during the inspection, and put away to separate locations, based on the inspection result.

Put away lines

Depending on the configured receiving process, a put away transaction may be required to deliver the material to the final inventory destination. In this case, you must perform a two-step receipt and complete the put away or delivery transaction to the PAR subinventory.

Once you submit the transaction, a confirmation message displays indicating that the receiving created the put away transaction.

Example of a PAR Replenishment Interorganization Internal Material Transfer

An interorganization internal material transfer represents a transfer of material from a source inventory organization to a destination inventory organization. You perform this type of transfer to replenish material from one inventory organization to another.

For example, the source inventory organization may represent a main storage facility used to replenish the various PAR locations. When the PAR location needs material, you replenish the material from the main storage facility.

You must complete the necessary setups at the subinventory and item subinventory levels. Additionally, you can create a location and associate it with the PAR subinventory. You must also set up the interorganization parameters. After running the replenishment process, you can review the supply order details and transfer order. Then, you can review the shipment lines, ship confirm, receive the transfer order, and put away the receipt line.

Scenario

This example of a PAR replenishment interorganization internal material transfer covers these steps:

  • Define location

  • Create subinventory

  • Associate item to a subinventory

  • Set up interorganization parameters

  • Run Replenish Inventory Request REST service

  • Process Supply Chain Orchestration Interface process

  • Review supply order details

  • Mange transfer orders

  • Manage shipment lines

  • Ship confirm

  • Receive expected shipments

  • Put away lines

This table describes each step in the example for a PAR replenishment interorganization internal material transfer.

Step Description

Define location

First, define the location to serve as your final deliver-to location when performing the deliver or put away transaction. Use an address naming convention that allows receiving personnel to route the material to the appropriate replenishment location. Use the Manage Locations page to set up the location.

Next, configure the subinventory to serves as the PAR location you intend to replenish. You must enable the PAR Location check box for the subinventory. Also, specify the Replenishment Count Method and Default Replenishment Count Type. You can also associate a location to the subinventory.

Optionally, you can create a subinventory group. A subinventory group is a grouping of subinventories that you can use to process PAR replenishment requests. For example, you can define a subinventory group consisting of five individual subinventories. You can then create a replenishment request for all five subinventories instead of creating individual replenishment requests for each subinventory.

Create subinventory

In this example, let's set up the subinventory as non-quantity tracked subinventory. In order to configure a subinventory as non-quantity tracked, set the Material Status field to Active: Not Available for Netting, ATP, and Reservations.

Once the material status is set, you can deselect the Quantity Tracked check box. In order to configure the subinventory as a PAR location, you must select the PAR location check box. By configuring the subinventory as a PAR location, you can now select the Replenishment Count Method and Default Replenishment Count Type.

Last, assign a location to the subinventory. This location represents the final deliver-to location when you put away the material receipt into inventory.

Associate item to a subinventory

In this example, the source type is Organization, indicating that you're replenishing the item subinventory from another inventory organization. The Organization field is mandatory when the source type is organization. For our example, specify the source organization as Boston Manufacturing. Additionally, you can also specify a sourcing subinventory if required.

Set up interorganization parameters

You must establish interorganization parameters prior to performing an interorganization internal material transfer. Interorganization parameters define the relationship between the source inventory organization and the destination inventory organization. The parameters specify the transfer type and receipt routing.

Run Replenish Inventory Request REST service

The Replenish Inventory Request REST service manages replenishment requests. When the REST request processes successfully, the return message text indicates the following: M1 Supply Request Batch Number: PAR12001. The process has successfully completed.

When submitting the Replenish Inventory Request REST service, you have the option to specify Yes or No for the Submit for Processing parameter. Selecting Yes indicates that the service submits the replenishment request immediately for processing. Selecting No indicates that the service doesn't submit the replenishment request immediately for processing. For those replenishment requests that aren't submitted immediately, you can use the Create Inventory Replenishment Request scheduled process to create inventory replenishment requests.

The Create Inventory Replenishment Request process supports these submission parameters:

  • Organization

  • Item

  • Subinventory

  • Subinventory group

When the replenishment request is for a requisition, the Replenish Inventory Request REST service creates a supply request batch number. The supply request batch number always has a prefix with PAR for PAR generated replenishment requests. You can use the supply request batch number when submitting the Process Supply Chain Orchestration Interface process.

Process Supply Chain Orchestration Interface process

The Process Supply Chain Orchestration Interface scheduled process creates supply orders based on the Supply Chain Orchestration interface records. To process these records, you can enter the scheduled process parameters and submit the request.

Let's use these values for our process parameters:

  • Supply Request System: Oracle Fusion Inventory Management

  • Organization: Enter the inventory organization that generated the PAR replenishment request

  • From Supply Request Batch Number: The batch number will always start with PAR. For example, PAR12001

  • To Supply Request Batch Number: Enter the ending batch number for a range or supply request batch numbers

  • From Supply Request Date: Starting supply request date

  • To Supply Request Date: Ending supply request date

Review supply order details

When the Process Supply Chain Orchestration Interface completes successfully, you can review the supply order details by navigating to the Manage Supply Lines task. Search by the supply request reference number to review the supply lines. The supply request reference number has a prefix of PAR such as in the example PAR12001.

When reviewing the supply order details, you can review the supply lines associated with the supply order. When you click on a supply line, you can review the line details. Navigate to the Execution Documents tab to view the purchase requisition number created for the replenishment request.

Mange transfer orders

You can view the transfer order by navigating to Manage Transfer Orders task.

Manage shipment lines

You can use the transfer order number displayed in the supply order details to search for the shipment in inventory management. You can navigate to the Manage Shipment Lines task to view the shipment line details. In order to view the shipment lines, you must login as a user with data access to the source inventory organization.

Ship confirm

Proceed with the ship confirm process.

Receive expected shipments

The next step in the process is to receive the material at the destination inventory organization.

Put away lines

Depending on the configured receiving process, a put away transaction may be required to deliver the material to the final inventory destination. In this case, you must perform a two-step receipt and complete the put away or delivery transaction to the PAR subinventory.

Once you submit the transaction, a confirmation message displays indicating that the receiving created the put away transaction.

Example of a PAR Replenishment Intraorganization Internal Material Transfer

An intraorganization internal material transfer represents a transfer of material from a source subinventory to a destination subinventory within the same inventory organization.

For example, the source inventory organization may represent a main storage subinventory used to replenish the various PAR locations. When the PAR location needs material, the material is replenished from the main storage subinventory within the same inventory organization.

You must complete the necessary setups at the subinventory and item subinventory levels. Additionally, you can create a location and associate it with the PAR subinventory. You must also set up the intersubinventory (intraorganization) parameters. After running the replenishment process, you can review the supply order details and transfer order. Then, you can review the shipment lines, ship confirm, receive the transfer order, and put away the receipt line.

Scenario

This example of a PAR replenishment intraorganization internal material transfer covers these steps:

  • Define location

  • Create subinventory

  • Associate item to a subinventory

  • Set up intersubinventory parameters

  • Run Replenish Inventory Request REST service

  • Process Supply Chain Orchestration Interface process

  • Review supply order details

  • Mange transfer orders

  • Manage shipment lines

  • Ship confirm

  • Receive expected shipments

  • Put away lines

This table describes each step in the example for a PAR replenishment intraorganization internal material transfer.

Step Description

Define location

First, define the location to serve as your final deliver-to location when performing the deliver or put away transaction. Use an address naming convention that allows receiving personnel to route the material to the appropriate replenishment location. Use the Manage Locations page to set up the location.

Next, configure the subinventory to serves as the PAR location you intend to replenish. You must enable the PAR Location check box for the subinventory. Also, specify the Replenishment Count Method and Default Replenishment Count Type. You can also associate a location to the subinventory.

Optionally, you can create a subinventory group. A subinventory group is a grouping of subinventories that you can use to process PAR replenishment requests. For example, you can define a subinventory group consisting of five individual subinventories. You can then create a replenishment request for all five subinventories instead of creating individual replenishment requests for each subinventory.

Create subinventory

In this example, let's set up the subinventory as non-quantity tracked subinventory. In order to configure a subinventory as non-quantity tracked, set the Material Status field to Active: Not Available for Netting, ATP, and Reservations.

Once the material status is set, you can deselect the Quantity Tracked check box. In order to configure the subinventory as a PAR location, you must select the PAR location check box. By configuring the subinventory as a PAR location, you can now select the Replenishment Count Method and Default Replenishment Count Type

The Replenishment Count Method defined for the subinventory is Request. This count method indicates that you will manually enter the order quantity in the replenishment request. The default replenishment count type of Order Quantity is defaulted

Last, assign a location to the subinventory. This location represents the final deliver-to location when you put away the material receipt into inventory.

Associate item to a subinventory

In this example, the source type is Organization. The Organization field is mandatory when the source type is organization. For our example, specify the source organization as Seattle Manufacturing. Since this is an intraorganization (transfer from one subinventory to another subinventory), the selected source organization will be the same organization that you're logged in as. For example, if you're logged in as inventory organization Seattle Manufacturing, the organization selected will also be Seattle Manufacturing. Optionally, you can specify a sourcing subinventory if required.

Since the replenishment count type is Order quantity, the PAR level isn't required. The expectation is that you will manually enter the order quantity in the replenishment request. In this example, let's enter 25 units for the order quantity.

Set up interorganization parameters

When performing an intraorganization transfer, you must define the intersubinventory parameters. The Manage Intersubinventory Parameters task defines the relationship between the source subinventory and the destination subinventory. Additionally, define the receipt routing between the two subinventories.

Run Replenish Inventory Request REST service

When submitting the Replenish Inventory Request REST service, you have the option to specify Yes or No for the Submit for Processing parameter. Selecting Yes indicates that the service submits the replenishment request immediately for processing. Selecting No indicates that the service doesn't submit the replenishment request immediately for processing. For those replenishment requests that aren't submitted immediately, you can use the Create Inventory Replenishment Request scheduled process to create inventory replenishment requests.

The Create Inventory Replenishment Request process supports these submission parameters:

  • Organization

  • Item

  • Subinventory

  • Subinventory group

The supply request batch number always has a prefix with PAR for PAR generated replenishment requests. You can use the supply request batch number when submitting the Process Supply Chain Orchestration Interface process.

Process Supply Chain Orchestration Interface process

The Process Supply Chain Orchestration Interface scheduled process creates supply orders based on the Supply Chain Orchestration interface records. To process these records, you can enter the scheduled process parameters and submit the request.

Let's use these values for our process parameters:

  • Supply Request System: Oracle Fusion Inventory Management

  • Organization: Enter the inventory organization that generated the PAR replenishment request

  • From Supply Request Batch Number: The batch number will always start with PAR. For example, PAR13001

  • To Supply Request Batch Number: Enter the ending batch number for a range or supply request batch numbers

  • From Supply Request Date: Starting supply request date

  • To Supply Request Date: Ending supply request date

Review supply order details

When the Process Supply Chain Orchestration Interface completes successfully, you can review the supply order details by navigating to the Manage Supply Lines task. Search by the supply request reference number to review the supply lines. The supply request reference number has a prefix of PAR such as in the example PAR13001.

When reviewing the supply order details, you can review the supply lines associated with the supply order. When you click on a supply line, you can review the line details. Navigate to the Execution Documents tab to view the purchase requisition number created for the replenishment request.

Mange transfer orders

You can view the transfer order by navigating to Manage Transfer Orders task.

Manage shipment lines

You can use the transfer order number displayed in the supply order details to search for the shipment in inventory management. You can navigate to the Manage Shipment Lines task to view the shipment line details. In order to view the shipment lines, you must login as a user with data access to the source inventory organization.

Ship confirm

Proceed with the ship confirm process.

Receive expected shipments

The next step in the process is to receive the material at the destination inventory organization.

Put away lines

Depending on the configured receiving process, a put away transaction may be required to deliver the material to the final inventory destination. In this case, you must perform a two-step receipt and complete the put away or delivery transaction to the PAR subinventory.

Once you submit the transaction, a confirmation message displays indicating that the receiving created the put away transaction.

FAQs for PAR Replenishment

The level at which the quantity is restocked. If the count falls below this quantity, and a PAR maximum quantity hasn't been specified, the PAR level calculates the reorder quantity.

In order to deselect the Quantity Tracked check box, you must first change the material status associated with the subinventory. Then, you can update the Quantity Tracked check box on the Manage Subinventories and Locators page.

What's the difference between quantity tracked and non-quantity tracked PAR locations?

When creating a subinventory or PAR Location you must determine whether or not the subinventory is quantity tracked or non-quantity tracked. Typically, you classify subinventories as non-quantity tracked for PAR replenishment. However, you can also configure PAR subinventories as quantity tracked.

When a subinventory is quantity tracked, this indicates that each transaction for the subinventory updates the on-hand quantity. In this case, the Quantity Tracked check box is selected by default. In order to deselect the Quantity Tracked check box, you must first change the material status associated with the subinventory. Then you can update the Quantity Tracked check box on the Manage Subinventories page.

Note: The Quantity Tracked check box is only enabled when the associated material status is Active: Not Available for Netting, ATP, and reservations.

How can I define the ship-to location associated with the PAR location?

Use the Manage Locations task in the Setup and Maintenance work area to define the ship-to location. Once you define the ship-to location, you can associate it with the PAR location. Navigate to the Manage Subinventories and Locators task to associate the ship-to location to the PAR location.

What are the replenishment source types supported for PAR replenishment?

Here are the four source types supported for PAR replenishment:

  • Movement Request Transfer: Transfer material from a source subinventory to a destination subinventory

  • Purchase Requisition: Replenish material from a supplier using a purchase requisition or purchase order

  • Interorganization Internal Material Transfer: Transfer material from a source inventory organization to a destination inventory organization using a transfer order

  • Intraorganization Internal Material Transfer: Transfer material from a source subinventory to a destination subinventory within an inventory organization using a transfer order

How can I review errors received when submitting the replenishment request?

Use the Review Replenishment Requests in Spreadsheet task available in the Inventory Management work area. This ADFdi user interface enables you to view any errors that you receive when processing replenishment requests.