Shipment Flow

This example demonstrates how to create a financial orchestration flow of shipment type for Vision Corporation, a multinational company that makes and sells computerized toys.

It describes how to create a financial orchestration flow between the following units:

• Vision Operations: The selling business unit located in the United States.

• Vision Distribution Center: The financial intermediary business unit located in Singapore.

• Vision China: The shipping business unit located in China.

• Schatze Toy Company: A retailer with locations in Germany.

The following figure illustrates the financial orchestration flow for Vision Corporation discussed in this example. It demonstrates how this flow separates the physical flow of goods from the financial flow for this transaction.

The following table summarizes the key decisions for this example.

Decisions to Consider	In this Example
Flow Type	Shipment
Selling business unit	Vision Operations
Customer	Schatze Toy Company
Shipping business unit	Vision Manufacturing
Intermediary business unit	Vision Distribution Center
Qualifier	All asset items
Sales order currency	USD (United States Dollar)
Sales order price	100.00 USD
Intercompany transfer price	Vision Manufacturing, Vision Distribution Center: Cost plus 15% Vision Distribution Center, Vision Operations: Sales order price less 10%
Intercompany trade currency	Vision Manufacturing, Vision Distribution Center: SGD Vision Distribution Center, Vision Operations: USD
Intercompany invoice	Vision Manufacturing, Vision Distribution Center: Required Vision Distribution Center, Vision Operations: Required
Track profit in inventory	Vision Manufacturing, Vision Distribution Center: Yes Vision Distribution Center, Vision Operations: Yes

Summary of the Tasks

The tasks involved to create a financial orchestration flow are:

1. Creating documentation and accounting rules

2. Creating transfer pricing rules

3. Creating profit center business unit party relationships

4. Creating financial orchestration qualifiers

5. Creating financial orchestration flows

6. Setting financial orchestration system options

7. Testing your financial orchestration flow

Creating Documentation and Accounting Rules

In this example, we create two documentation and Accounting rules:

1. Vision Manufacturing Documentation and Accounting Rule

2. Vision Distributions Documentation and Accounting Rule

Creating the Vision Manufacturing Documentation and Accounting Rule

For the trade between Vision Manufacturing and Vision Distributions, Vision Manufacturing is the seller. It uses the currency of the buyer, Vision Distributions and it uses the standard currency rate that Vision Corporation uses. Vision Manufacturing uses trade distributions, tracks profits in inventory, and requires an intercompany invoice. To create the documentation and accounting rules, do the following:

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

   • Offering: Manufacturing and Supply Chain Materials Management

   • Functional Area: Supply Chain Financial Flows

   • Task: Manage Supply Chain Financial Orchestration Documentation and Accounting Rules

2. On the Manage Documentation and Accounting Rules page, click Actions, and then click Create.

3. On the Create Documentation and Accounting Rule page, set the values listed in the following table.

   Field	Value
   Name	Vision Operations Documentation and Accounting Rule
   Currency Option	Buying Node
   Conversion Type	Corporate
   Trade Distributions	Selected
   Track Profits In Inventory	Selected
   Intercompany Invoices	Selected
   Effective Start Date	Today's date

4. Click Save and Close.

Creating the Vision Distributions Documentation and Accounting Rule

For the trade between Vision Distributions and Vision Operations, Vision Distributions is the seller. It uses the currency of the sales order and it uses the standard currency rate that Vision Corporation uses. Vision Distributions uses trade distributions, tracks profits in inventory, and requires an intercompany invoice. To create the documentation and accounting rules, do the following

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

   • Offering: Manufacturing and Supply Chain Materials Management

   • Functional Area: Supply Chain Financial Flows

   • Task: Manage Supply Chain Financial Orchestration Documentation and Accounting Rules

2. On the Manage Documentation and Accounting Rules page, click Actions, and then click Create.

3. On the Create Documentation and Accounting Rule page, set the values listed in the following table.

   Field	Value
   Name	Vision Distributions Documentation and Accounting Rule
   Currency Option	Source Document
   Conversion Type	Corporate
   Trade Distributions	Selected
   Track Profits In Inventory	Selected
   Intercompany Invoices	Selected
   Effective Start Date	Today's date

4. Click Save and Close.

Creating Transfer Pricing Rules

In this example, we'll create two transfer pricing rules:

1. Vision Manufacturing Transfer Pricing Rule.

2. Vision Distributions Transfer Pricing Rule.

Creating the Vision Manufacturing Transfer Pricing Rule

Vision Manufacturing must use the production cost that it incurs to produce computerized toys as the transfer pricing rule. It requires a 15% markup on this cost so that it can realize a profit when it sells products to internal buyers. To create the intercompany transfer price between Vision Manufacturing and Vision Distributions, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial Orchestration Transfer Pricing Rules.

3. On the Manage Transfer Pricing Rules page, click Actions, and then click Create.

4. On the Create Transfer Pricing Rule dialog box, set the values listed in the following table.

   Field	Value
   Name	Vision Manufacturing Transfer Pricing Rule
   Accounting Transfer Price	Cost Basis.
   Markup Percentage	15
   Effective Start Date	Today's date.

5. Click Save and Close, and then click Done.

Creating Vision Distributions Transfer Pricing Rule

Vision Operations is the selling business unit. It retains a 10% margin on the sales order price when it sells products to external sellers. To create the intercompany transfer price between Vision Distributions and Vision Operations, do the following work:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial Orchestration Transfer Pricing Rules.

3. On the Manage Transfer Pricing Rules page, click Actions, and then click Create.

4. On the Create Transfer Pricing Rule dialog box, set the values listed in the following table.

   Field	Value
   Name	Vision Distributions Transfer Pricing Rule
   Accounting Transfer Price	Source Document Price Basis
   Markup Percentage	-10
   Effective Start Date	Today's date.

5. Click Save and Close, and then click Done.

Creating Profit Center Business Unit Party Relationships

In this example, we will create the profit center BU Party relationship for the following business units:

1. Intercompany buyer profile for Vision Operations

2. Intercompany seller and buyer profile for Vision Distributions

3. Intercompany seller profile for Vision Manufacturing

Creating Intercompany Buyer Profile for Vision Operations

To create the party relationship for the Vision Operations profit center business unit, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Profit Center Business Unit Party Relationships.

3. On the Manage Profit Center BU to Party Relationships page, click Actions, and then click Create.

4. On the Create Profit Center BU to Party Relationships page, set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Profit Center Business Unit	Vision Operations
   Default Trade Organization	V1
   Ship-to Location	Leave empty
   Customer	Vision Distribution Center
   Supplier Number	20061

   Vision Operations is an intercompany buyer. It buys the goods from an internal organization, Vision Distribution Center.

5. In the Profit Center BU Profiles section, edit the Intercompany buyer profile.

6. In the Bill to BU for Payables Invoice and PO, set the values listed in the following table. Leave all other fields at their default value, and then click OK.

   Field	Value
   Procurement Business Unit	Vision Operations
   Bill to Business Unit	Vision Operations

7. In the Customer Locations for Seller's Receivable Invoice and Sales Order, set the values listed in the following table. Leave all other fields at their default value, and then click OK.

   Field	Value
   Seller's Customer Address Set	Vision Operations
   Bill-to location	CDRM_112

8. On the Create Profit Center BU to Party Relationships page, click Save and Close.

Intercompany Seller Profile for Vision Manufacturing

To create the party relationship for the Vision Manufacturing profit center business unit, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Profit Center Business Unit Party Relationships.

3. On the Manage Profit Center BU to Party Relationships page, click Actions, and then click Create.

4. On the Create Profit Center BU to Party Relationships page, set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Profit Center Business Unit	Vision Manufacturing
   Default Trade Organization	C1
   Ship-to location	Leave Empty
   Customer	Vision Distributions
   Supplier Number	20061

   Vision Manufacturing is an intercompany seller. It sells the goods to an internal organization, Vision Distributions.

5. In the Profit Center BU Profiles section, edit the Intercompany buyer profile.

6. In the Bill to BU for Payables Invoice and PO, set the values listed in the following table. Leave all other fields at their default value, and then click OK.

   Field	Value
   Receivables Business Unit	Vision Manufacturing
   Customer Address Set	Vision Manufacturing Set

7. In the Supplier Site for Buyer's Payable Invoice and PO, set the values listed in the following table. Leave all other fields at their default value, and then click OK.

   Field	Value
   Buyer's Procurement Business Unit	Vision Distributions
   Buyer's Bill to Business Unit	Vision Distributions
   Supplier Site	VMG_SUPPLIER_SITE

8. On the Create Profit Center BU to Party Relationships page, click Save and Close.

Creating Financial Orchestration Qualifiers

You must create the financial orchestration qualifiers that configure Financial Orchestration to run the financial orchestration flow for Vision Operations only when the C1, a warehouse that belongs to the Vision Manufacturing ships an asset item. To create these qualifiers, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial Orchestration Qualifiers.

3. On the Manage Financial Orchestration Qualifiers page, click Actions, and then click Create.

4. On the Create Financial Orchestration Qualifier page, set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Name	Vision Operations Qualifiers
   Description	Asset Item = "Yes" AND ship-from organization = "C1"
   Business Process Type	Shipment
   User-Defined Catalog	ASCP Item Category

5. Click Actions, Add Before, and then set the values listed in the following table.

   Field	Value
   Parameter	Asset Item
   Operator	Equals
   Value	Yes

6. Click Actions, Add Before, and then set the values listed in the following table.

   Field	Value
   Parameter	Ship-from organization
   Operator	Equals
   Value	C1 C1 is a warehouse that belongs to Vision Manufacturing.

7. Click Save and Close.

Creating Financial Orchestration Flows

You must create a financial orchestration flow. To create this flow, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial Orchestration Qualifiers.

3. On the Create Financial Orchestration Qualifier page, set the values listed in the following table Leave all other fields at their default value.

   Field	Value
   Name	Vision Operations Financial Orchestration Flow
   Business Process Type	Shipment
   Priority	1
   Effective Start Date	Today's date

4. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add Row, and then set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Shipping Business Unit	Vision Manufacturing
   Shipping Legal Entity	Vision China
   Selling Business Unit	Vision Operations
   Selling Legal Entity	Vision Operations
   Effective Start Date	Today's date

5. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add Row, and then set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Selling Business Unit	Vision Manufacturing
   Selling Legal Entity	Vision China
   Buying Business Unit	Vision Distributions
   Buying Legal Entity	Vision Singapore
   Selling Trade Organization	Leave empty.
   Buying Trade Organization	D1
   Transfer Pricing Rule	Vision Manufacturing Transfer Pricing Rule
   Documentation and Accounting Rule	Vision Manufacturing Documentation and Accounting Rule
   Receivables Invoice Type	Intercompany
   Receivables Credit Memo Type	Credit Memo
   Payment Terms	Immediate

6. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add Row, and then set the values listed in the following table. Leave all other fields at their default value.

   Field	Value
   Selling Business Unit	Vision Distributions
   Selling Legal Entity	Vision Singapore
   Buying Business Unit	Vision Operations
   Buying Legal Entity	Vision Operations
   Selling Trade Organization	Leave empty.
   Buying Trade Organization	V1
   Transfer Pricing Rule	Vision Manufacturing Transfer Pricing Rule. Alternatively, you can define the transfer pricing rules in Oracle Pricing and associate the Transfer Pricing Rule attribute to the value Pricing Strategy.
   Documentation and Accounting Rule	Vision Distributions Documentation and Accounting Rule
   Receivables Invoice Type	Intercompany
   Receivables Credit Memo Type	Credit Memo
   Payment Terms	Immediate

7. Click Save.

Setting Financial Orchestration System Options

You must set the Financial Orchestration system options. To create these options, do the following:

1. In the Setup and Maintenance work area, from the Tasks menu, click Manage Implementation Projects.

2. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial Orchestration system options.

3. On the Manage Financial Orchestration system options page, click Actions, and then click Create. Enter the values listed in the following table.

   Field	Value
   Item Validation Organization	V1
   Consider service item for descriptive global purchase order processing	Select this check box to configure the global procurement business process flow for description lines either with a service item or without the service item setup.
   Service Item	RR_RP_Item24
   Maximum Number of Records per Batch	100
   Calculate tax for trade receipt accrual	Select this check box

4. Click Save and Close.

Testing Your Financial Orchestration Flow

Perform the following steps to make sure your financial orchestration flow works correctly:

1. Sign in to your order capture system, and then use it to create a sales order that will start the financial orchestration flow that you configured in this example.

2. Make sure the order includes an asset item that a warehouse belonging to the Vision Manufacturing must ship to the Schatze Toy Company. The values listed in the following table are examples that will start this flow. Your order capture system might use different field.

   Field	Value
   Business Unit	Vision Operations
   Ship-to customer	Schatze Toy Company
   Warehouse	C1

3. Pick Release and ship the sale order line.

4. Verify Financial Orchestration Execution.

   • Navigate to the Financial Orchestration work area, and then the Monitor Financial Orchestration Execution page.

5. Issue a query that locates the order. For example, in the Sales Order field, enter the Orchestration Order number that you noticed in step 1, such as 181094.

6. Verify that the Search Results shows the sales order and its status. The financial orchestration flow created by you has been used for financial orchestration execution. Click View Tasks to show the list of financial orchestration tasks that will be created for this sales order.