Overview of Manufacturing in Supply Chain Management Business Processes
Being a part of the Oracle Fusion Cloud Supply Chain Management, Oracle Manufacturing plays an important role in supporting the following cross-functional and advanced fulfillment processes:
Plan-to-Produce
Plan-to-produce refers to scenarios where products are manufactured based on a forecast. Sales orders are typically filled from existing stock, and work orders are created to replenish that stock based on planning recommendations.
The plan-to-produce process starts with running the plan in Oracle Supply Chain Planning, and releasing the planned order recommendations for work execution. This leads to the creation of supply orders in Oracle Supply Chain Orchestration, which then initiates the creation of work orders in Manufacturing. Once created, the work orders are released to the shop floor for production.
After reporting product completion at the final operation, the finished goods inventory is updated, and work orders are finally closed.
For more information about plan-to-produce process, refer to the Oracle Supply Chain Management Using Supply Planning guide.
Back-to-Back
Back-to-back order fulfillment flow refers to scenarios where the supply for fulfilling a sales order is created only after the order is booked. And in some cases, the demand is fulfilled by manufacturing the product representing a build to order scenario.
The back-to-back process begins with order capture, and scheduling of the sales order in Oracle Order Management. Once scheduled, Oracle Global Order Promising promises the back-to-back orders, and releases supply recommendations or the supply picture to Supply Chain Orchestration. Once the sales order fulfillment line is scheduled, Order Management releases fulfillment line information or the demand picture to Supply Chain Orchestration. Supply Chain Orchestration processes the demand picture from Order Management, and the supply picture from Global Order Processing, to create a supply order in Supply Chain Orchestration.
In a scenario where the product must be manufactured to fulfill the order, the supply document is a work order, and Supply Chain Orchestration initiates the creation of the work order in Manufacturing. As soon as the work order is created in Manufacturing, it's tied to the back-to-back sales order in the form of a reservation in Oracle Fusion Inventory Management.
Production activities are reported for the work order and the final operation completion transaction yields finished goods to inventory, which are then shipped to the customer to fulfill the back-to-back sales order.
For more information about back-to-back order fulfillment, refer to the Implementing Back-to-Back Fulfillment chapter in the Oracle Supply Chain Management Implementing Manufacturing and Supply Chain Materials Management Guide.
Configure to Order
Configure to Order process is essentially a back-to-back fulfillment process with a few key differences in the processing of a configured item in relation to a standard item. This flow assumes that the order is created in Oracle Fusion Order Management, but the source of configured orders could be Oracle Fusion Configure, Price, and Quote, Oracle Order Management, Oracle Configurator, or another source.
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This process starts with a sales order customer being created in Order Management with the Assemble to Order (ATO) model item as the ordered item. When an ATO model is ordered, the customer has the ability to configure the model, and select the options.
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Once the options are selected, the model and selected options are sent to Supply Chain Orchestration to determine if the configuration already exists.
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If a match is found, the existing configured item is passed back to Order Management. If there is no match, the configured item creation process is initiated, and a new configured item is created in Oracle Product Model using attributes values from the base model item. The new item is then passed back to Order Management.
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Next, the sales order is booked in Order Management, and is sent to Global Order Promising so that the order can be scheduled and the source of supply can be determined based upon sourcing rules set up at the model level. The supply and demand information for the configured item is then sent to Supply Chain Orchestration, and a supply order is created.
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If the supply has to be fulfilled by manufacturing the configured item, Supply Chain Orchestration initiates the creation of the work order for the configured item in Manufacturing. The work order for the configured item is created using a dynamically-generated configured item work definition based on the ATO model work definition in Oracle Fusion Manufacturing.
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The work order is then executed and completed. Once the configured product is available, it's shipped to the customer, showing the model and options selected on the bill of lading, and the order is fulfilled.
Sales Order attachments from back-to-back sales orders for standard items and configured items are displayed in the Reservations tab of the work order.
Contract Manufacturing
Contract manufacturing refers to scenarios where an original equipment manufacturer (OEM) outsources the manufacturing of a standard product to an external supplier referred to as a contract manufacturer (CM).
A contract manufacturing flow could be initiated either to fulfill a sales order created in Order Management, or as a result of running a supply chain plan in Planning Central and releasing the planned orders. In either case, supply orders are created in Supply Chain Orchestration, following which it initiates the creation of a work order in Manufacturing to track the progress of manufacturing at the contract manufacturer's facility.
Supply Chain Orchestration then sends a request to Purchasing for creating a purchase order on the contract manufacturer for the contract manufacturing service item. Once the manufacturing process is completed, the contract manufacturer reports completion to the OEM. Manufacturing receives the details and automatically initiates the creation of a receipt of the contract manufacturing service item against the purchase order.
Next, it automatically reports completion of the last operation of the work order that results in increasing the contract manufacturing finished good item inventory, and backflush of contract manufacturing service item in the contract manufacturing organization.
Contract Manufacturing is applicable for standard products. It's not supported for configured (ATO, CTO) products. For more information about Contract Manufacturing, refer to the Implementing Contract Manufacturing chapter in the Oracle Supply Chain Management Implementing Manufacturing and Supply Chain Materials Management Guide.
Outside Processing
Outside processing is a commonly observed business process where one or more operations of a work order are outsourced to a supplier who provides specialized manufacturing services. These services may vary depending on the nature of the industry.
The first step is to create and release a work order with supplier operations in Manufacturing. Work orders are scheduled using the unconstrained logic in Oracle Planning Central and Supply Planning. Once the work order is released, a request is sent to Supply Chain Orchestration to create a purchase requisition. Supply Chain Orchestration in turn creates a supply order and triggers the creation of a purchase requisition in Self Service Procurement. An outside processing purchase order is created in Purchasing using the details maintained in the outside processing blanket agreement.
The next step is to execute work order by reporting quantities as completed at the operation prior to the supplier operation following which, a request is sent to Supply Chain Orchestration to create a shipment line. Supply Chain Orchestration in turn creates a supply order line and triggers the creation of a shipment line in Shipping. A shipment is manually created for the shipment line which is then confirmed and closed. Based on the options set for the Ship Confirm Rule, the processes to print packing slip and bill of lading are automatically launched.
The next step is to receive the goods from the supplier in Receiving and deliver them to manufacturing. You can optionally create an Advance Shipment Notice (ASN) in Oracle Fusion Supplier Portal or Oracle Fusion Receiving which can be used to create a receipt. However, ASN creation is mandatory in case of consecutive supplier operations. For a non-serialization enabled supplier operation, receipt and delivery of goods to manufacturing results in automatic completion of quantities at the supplier operation. Supplier operations are then managed and tracked in manufacturing. The receipt, delivery and operation transactions result in receipt and cost accounting in Oracle Cost Management.
For more information about Outside Processing, refer to the Implementing Outside Processing chapter in the Oracle Supply Chain Management Implementing Manufacturing and Supply Chain Materials Management guide.
Inventory Replenishment Min-Max Planning
Min-max planning is an inventory replenishment method where replenishment supply requests are generated based on the specification of minimum and maximum inventory levels for items.
Min-max planning in Oracle Inventory Management optionally considers work order supply and work order component demand in replenishment calculations, and generates replenishment work order requests for manufactured items. This in turn leads to the creation of supply orders in Supply Chain Orchestration, which then initiates the creation of work orders in Oracle Manufacturing. Production activities are reported for the work orders and the final operation completion transaction replenishes the finished goods in inventory. In process manufacturing scenarios, only the primary item can be planned using min-max planning.
For more information about Min-Max Planning, refer to the Plan Inventory Replenishment chapter in the Oracle Supply Chain Management Using Inventory Management Guide.
Direct Procurement of Materials for Work Orders
In some scenarios, materials that are consumed in the manufacturing process aren't planned in advance. They are instead procured directly for work orders. In such scenarios, you can procure material directly for a work order by creating a requisition and then associating the requisition to the work order and the desired operation in Self Service Procurement. A purchase order is created for the requisition, and material is received and delivered directly to the work order. You can review the details of purchase requisitions, purchase orders, and receipts from the work order, and perform corrective actions, such as correcting receipt quantities and returning materials.
Project-Specific Manufacturing
Project-specific manufacturing refers to a supply chain management scenario where manufacturing activities are tracked by project. In such scenarios, executing work orders and manufacturing transactions in the context of a project is essential to ensure that the right material and resources are used and manufacturing costs are allocated to the right project. In addition, it's necessary to ensure that only the eligible raw material and subassemblies are used in project-specific manufacturing work orders and completed products are put away into project-specific inventory.
Supply Chain Management along with Oracle Fusion Project Portfolio Management application provides an end-to-end, integrated solution to support project-specific manufacturing execution. This solution supports business processes of both manufacturing, and asset intensive companies. It provides the ability to execute project-specific manufacturing by creating a work order, or through orderless execution, issue components from common, or project-specific inventory, and put away the end product into project-specific inventory. You can purchase outside processing services, procure material directly for project-specific work orders, and import material and resource costs to the project.